According to IC Insights nearly one-quarter of the worldwide IC market is now comprised by the Top 10 fab-/asset-lite companies.
The top 10 IDMs pursuing fab-lite/asset-lite strategies accounted for 23% of the $261.3bn IC market in 2010, or about $59.8bn.
The fab-lite (or asset-lite) business model has been embraced more by growing number of major integrated device manufacturers (IDMs) worldwide compare to any other technology in the IC industry.
Most recently, large Japanese IC makers, namely Toshiba, Renesas, Sony, and Fujitsu joined the fab-lite/asset-lite movement several years after US and European IDMs began reining in capital expenditures on expensive new 300mm wafer fabs and increasing their use of third-party foundries.
According to an IC Insights report, nearly all IDMs today (excluding giant Intel and memory makers) are now aiming to keep capital spending at or below 10% of annual sales compared to the IC industry’s average of more than 20% in the last decade.
The advent of fab-/asset-lite has led IDMs to move to fab-/asset-lite strategies, such as LSI and most recently Integrated Device Technology (IDT), which is now selling its 200mm fab in Oregon.
However, many other IC manufacturers insist "lite" business models are sustainable over the long term since they’ve narrowed their strategic product focus to categories that do not require 300mm wafer processes or expensive plants.
The top 10 fab-/asset-lite IDMs outsourced approximately 21% of their IC production requirements to third-party manufacturers in 2010, which generated nearly $12.6bn in sales from devices made by foundry companies last year, the report said.
Sales of foundry-made ICs for these 10 companies are projected to reach $34bn in 2015, which would be a compound annual growth rate (CAGR) of 22% from $12.6bn in 2010.
IC Insights estimates that the top 10 IDM fab-/asset-lite companies will outsource about 43% of their IC production requirements in 2015, if current strategies remain in place.
