Role of yield management in fabless-foundry partnerships

In the semiconductor industry, the fabless-foundry partnership business is expected to reach $68 billion by the end of this century. The majority of the growth in sales is expected to be in the sub-0.5 micron technologies. Given the rate of growth and the emerging complex technology challenges for the future generation products, large investment in capital, time, effort have to be dedicated for ensuring successful partnership outcomes. In this paper, we emphasize the importance of yield management in establishing successful partnership between fabless firms and wafer foundries, and present game theoretic models on coordination and some field observations.