By Mark Danna, Owens Design, Fremont, California, USA

Much has been written recently about the escalating cost of R&D funding required by semiconductor equipment OEMs in order to stay on the IC development trajectory required by the ITRS and Moore’s Law. The gap in what is required and what can be supplied, based on the current OEM business model, has shown that this deficit could be as high as $9.3 billion by the year 2010 [1]. Unfortunately, the main focus of conversation has been on the deficit itself with little said about potential solutions to the problem other then slowing down the pace driven by Moore’s Law. If we believe this to be an accurate data point, there must be a revolutionary change in the way equipment OEMs conduct business today.

Not only must OEMs optimize the use of their internal resources, they must also look outside their own four walls for innovative solutions; they must learn from the examples of others who have already taken on this challenge and drastically reduced R&D costs by making innovative changes to the way business is conducted. Early attempts at reducing R&D costs, such as the formation of consortia and alliances such as SEMATECH have helped. In fact, it can be shown that SEMETECH has had considerable impact on slowing the growth rate of R&D costs [2]. However, do to the overall size of the gap in necessary spending, this approach has not proven to be the complete answer.

Core vs. commodity technology
R&D spending is 4