ST increases outsourcing, denies fab-lite strategy

Peter Clarke, EE Times
(05/24/2006 6:54 AM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=188101947

LONDON — Leading European chipmaker STMicroelectronics has taken the proportion of advanced CMOS logic that it puts out to foundry above 50 percent, the company told a meeting of financial analysts’ held here Tuesday (May 23). However, the company denied it was adopting a fab-lite strategy or that it was putting itself at risk of being unable to supply customers due to manufacturing shortages.

In the first quarter of 2006 53 percent of ST’s advanced CMOS logic wafers &151; defined by ST to be 0.13-micron and more advanced manufacturing processes — were processed externally. This figure was compared with 42 percent made externally in the first quarter of 2005. By the fourth quarter of 2006 ST intends to increase the proportion of external manufacture to about 59 percent while it projects that the volume of advanced CMOS logic wafers it requires will have doubled from Q1 2006.

As the proportion of outsourcing was revealed ST was challenged from the floor as to whether the company had turned a corner and followed the likes of Philips Semiconductor and Freescale Semiconductor into a so-called “fab-lite” strategy.

“We don’t have a fab-lite strategy,” said Alain Dutheil, chief operating officer of ST, in response. “When we can we go to foundry.”

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