Evolutionary business models and inter-firm engineering processes between the foundry and fabless in the semiconductor industry

The goals of this paper are to explore the evolutionary business models between the foundry and fabless and the inter-firm engineering processes. By conducting field interviews and empirical study, this research summarizes three phases of inter-firm business models which include: transaction-based, partnership-based, and collaboration-based relationship. In the third phase, the participating partners include not only the foundry/fabless players but also the third-party suppliers such as EDA vendors, IP providers and design service providers. The transaction targets are exchanged mainly to gain “complementary assets” so that each player can reduce its investment and development risks. To reduce the “transaction costs” within this alliance, these players need seamless collaboration processes and effective inter-firm engineering processes. Service management from the foundry side is also described using a generic framework and some business implications are provided.