Other key research findings include:
· Manufacturing strategy: In general, while the relationship with foundries is somewhat at an arm’s length, an IDM’s balanced manufacturing strategy seems to be paying off at least in the short term. The importance of having internal manufacturing was reinforced not only in terms of having a high level of coordination between product design and manufacturing activities, but also having greater leverage over foundries.
· Intellectual property (IP) reuse: On average, an IDM reuses about 73% of design IP in the revision of an existing product design and about 44% in a new product design.
· Source of IP: A large proportion of IP for IDMs continues to be internal (84%) with some IP dependence on third-party IP firms and foundry suppliers.
· IDM-foundry relationships:
· IDM-complementor relationships:
“This study provides a systematic analysis of the nature of challenges and opportunities faced by IDMs that have traditionally depended on their internal manufacturing resources,” explains Dr. Kapoor, principal investigator of the research and author of the report. “We believe these findings will help semiconductor industry executives benchmark their business models and design their organizations, so they can leverage their internal capabilities as well as those within their ecosystem.”
“The quickening pace of change combined with increasing technological and market complexity makes the semiconductor industry one of the most challenging environments in which to compete. As a result, many companies are redesigning their business models not only within the company itself, but also at the collaborative interface between the company and its diverse set of partners,” adds Barnett Silver, senior vice president and principal for ATREG. “Key indicators such as the different sources of IP, the extent of IP reuse, the nature of competitive differentiation, and time-to-market drivers can help inform semiconductor companies’ technology strategies and outcomes.”
Notes to editors
The full Wharton-ATREG research report is available for download at http://www.atreg.com/
*Collaborative Innovation in the Global Semiconductor Industry: A Report on the Findings from the 2010 Wharton-GSA Semiconductor Ecosystem Survey, Dr. Rahul Kapoor / GSA, http://www.gsaglobal.org/
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About ATREG, Inc.
Headquartered in Seattle, USA, ATREG is a global advisory firm to the semiconductor industry. The company provides some of the world's largest and most reputable companies with objective market analysis, strategic advice, and transaction execution expertise for the disposition and acquisition of operational assets. For more information, please visit us online at www.atreg.com.
About the Wharton School
Founded in 1881 as the first collegiate business school, the Wharton School of the University of Pennsylvania is recognized globally for intellectual leadership and ongoing innovation across every major discipline of business education. With a broad global community and one of the most published business school faculties, Wharton creates ongoing economic and social value around the world. The school has 5,000 undergraduate, MBA, executive MBA, and doctoral students, more than 9,000 annual participants in executive education programs as well as a powerful alumni network of 91,000 graduates. For more information, please visit us online at http://www.wharton.upenn.edu/