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ADI holds on to manufacturing amid IoT rise

Posted: 09 Jun 2014  Print Version  Bookmark and Share

Keywords:Analog Devices  IoT  manufacturing  fab-lite  Moore's Law 

Analog Devices Inc. is operating a fab-lite business model: it manufactures some chips in house where it feels the design is closely tied to the manufacturing process such as in analog, mixed-signal and MEMS, and where it feels it is only adding value in design on a standard process, it outsources. It has two manufacturing sites; a 150mm wafer fab in Wilmington, Massachusetts and a 200mm wafer fab in Limerick, Ireland.

Across the company the in-house to external manufacturing ratio is roughly 50:50, according to Denis Doyle, VP responsible for the Irish manufacturing site. Doyle is also an Analog Devices Fellow having spent more than 20 years in R&D with the company.

Denis Doyle

But many have argued that fab-lite is a misnomer, and just another way of identifying the long and drawn-out exit from manufacturing as old amortised fabs continue to churn out products but companies seek to reduce their R&D budgets and capital expenditure.

On the other hand, analog, MEMS and sensor circuits seem to be enjoying renewed business significance as their ability to create the value within equipment and command margin has been maintained while almost all the digital CMOS markets are crowded with players and margins always seem to be under pressure.

Has that changed the landscape and does it mean Analog Devices will invest in manufacturing?

"Everybody has followed Moore's Law and it has served everyone well. But there is some uncertainty now. People recognise that miniaturisation is becoming much more expensive and that the More-than-Moore axis is important, leading to the creation of the Internet of Things (IoT).

But the roadmap there is not as certain and nor are the business models," said Doyle.

"For example people use the term MEMS foundry but it is not like a CMOS foundry. It is really MEMS outsourcing because MEMS devices are so specific and process-related."

"IoT is very exciting. We feel the market is coming towards us with our skills in wireless transmission, sensors, conversion of data, process control and monitoring. And it is particularly relevant in the business sectors we serve; industrial, automotive, healthcare. IoT is about measuring more, converting more of the real world to a digital version, and it is only just starting. So it is not about Moore's Law ending, but changing.

Both of ADI's wafer fabs able to run a wide variety of processes including CMOS, BiCMOS, DMOS and BCD at geometries from 3-0.18um, as well as MEMS processes. One reason for ADI to maintain manufacturing is that in the sectors it serves it has to be able to supply customers for a long time.

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