Rethinking the chip industry business model: collaborate or else
04/01/2007
The tectonic plates beneath the semiconductor industry are shifting faster and more extensively than ever before. Much of the demand is coming from fast-changing, fad-driven consumer applications. Market forces require that electronic systems manufacturers and chipmakers deliver the latest, most innovative, high-powered and ultra-compact products in record time-but at competitive prices.
For the health of the semiconductor and equipment industries, we need to find practical ways to diffuse R&D costs so that no one segment of the semiconductor community is overburdened. At Axcelis, we found that forming collaborative partnerships with key companies has brought huge benefits in productivity, innovation, and financial risk management. We believe this business model can help the industry address many of its R&D challenges, avoid costly research dead-ends, eliminate redundant efforts, and cut costs by sharing company resources.
However, forming and maintaining collaborative partnerships is not trivial. For a collaboration to work, all parties must see a potential benefit that is greater than what they would see by making the investment on their own. It’s critical that, at the outset, each party understands the risks and rewards involved.
For example, Axcelis partnered with a customer to develop a new capability on our latest high-dose ion implantation tool. Our two companies agreed up-front that:
- The ion implantation tool would reside at Axcelis, which would run qualification tests for several months before being shipped.
- The customer would place an order for the tool while it was housed at Axcelis.
- We would have a milestone-based payment structure-for every development milestone Axcelis reached, the customer would make a payment toward the tool.
Both companies had skin in the game, sharing the risks and rewards. This arrangement required careful planning, including a joint ROI analysis. We also outlined a set of realistic project goals and schedule to ensure greater efficiency.
More recently, Axcelis has seen a compelling but time-critical market need to develop an ion implantation technology that would let chipmakers respond quickly to a number of emerging trends, including manufacturing of advanced mobile memory devices requiring dual poly-gate doping and advanced logic chips with shallower junctions. At the same time, SemEquip, a manufacturer of new ion source technology and material delivery systems, had the critical cluster ion source technology we needed.
To meet our mutual market goals, Axcelis, SemEquip, and ATMI, a materials supplier, formed an alliance to jointly develop, market, and support what became Axcelis’s Optima HD Imax molecular implant system. Axcelis provided the ion implantation system; SemEquip added the ion source; and ATMI delivered the cluster boron materials. Working together, we were able to leverage our technology to bring this technology to market faster than either of us could on our own.
This collaboration has proved to be a valuable, truly symbiotic relationship. Now that the product is on the market, we continue to work closely together, providing customer support, and we have partnered to co-market the product at key industry events such as SEMICON shows and The ConFab.
In many collaborative partnerships, a primary concern is protecting each partner’s intellectual property (IP). In another successful collaboration, this time with a different materials supplier, we found that a three-part “field-of-use” approach worked very well: Axcelis owned the hardware IP, the materials supplier owned the materials IP, and we jointly owned the process IP, with licensing rights clearly outlined. With IP clearly defined, both parties feel “safe” about sharing information and resources.
I believe that such collaborations will become more common as an effective way to adapt to the constantly changing realities of the semiconductor market. In fact, companies in this industry really have no choice in the matter. Realistically, this new business model is critical to resolving the R&D funding gap problem and ensuring the health of our industry-and individual companies-for years to come.
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Mark Namaroff is senior VP of marketing at Axcelis Technologies Inc., 108 Cherry Hill Drive, Beverly, MA; ph 978/787-4000, e-mail [email protected].