History
Prior to the 1980s, the semiconductor industry was vertically integrated. Semiconductor companies owned and operated their own silicon-wafer fabrication facilities and developed their own process technology for manufacturing their chips. These companies also carried out the assembly and testing of their chips, the fabrication.
Meanwhile, with the help of private-equity funding, smaller companies began to form, with experienced engineers exercising their entrepreneurial prowess by establishing their own IC design companies focused on innovative chip solutions.
As with most technology-intensive industries, the silicon manufacturing process presents high barriers to entry into the market, especially for small start-up companies. So, Integrated Device Manufacturers (IDMs) had excess production capacity. The smaller companies began to take advantage of the opportunity- relying on IDMs to manufacture the chips they were designing.
These conditions underlay the birth of the fabless business model. Companies were manufacturing integrated circuits (ICs) without owning a fabrication plant. Simultaneously, the foundry industry was established by Dr. Morris Chang with the founding of Taiwan Semiconductor Manufacturing Corporation (TSMC). Foundries became the cornerstone of the fabless model, providing a non-competitive manufacturing partner for fabless companies.
In 1994, Jodi Shelton, along with a half a dozen CEOs of fabless companies, established the Fabless Semiconductor Association (FSA) to promote the fabless business-model globally. Eventually, the FSA became the global voice for the fabless ecosystem, with over 500 corporate members in 25 countries.
In December 2007, the FSA transitioned to the GSA, the Global Semiconductor Alliance. The organizational transition reflected the role FSA had played as a global organization that collaborated with other organizations to co-host international events. Additionally, the GSA leadership is composed of regional leadership councils with executives from those regions who serve as advisers to the GSA Board of Directors on global and regional issues. Those leadership councils are the Asia-Pacific Leadership Council and the Europe, Middle East and African (EMEA) Leadership Council. The transition also highlights GSA's membership and mission expansion beyond fabless to include the entire semiconductor supply chain.
Read more about this topic: Fabless Semiconductor Companies
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