Pattern of vertical engineering collaboration between foundry and design service provider

As IC design and manufacturing complexities continue to increase exponentially, it is becoming less practical for a single company to provide products and services without collaborated partners. The goal of this research is then to explore how foundries and design service providers collaborate with each other under the new business paradigm. By conducting field interviews and empirical study on six collaboration cases, this research proposes four different collaboration patterns, which are: complementary-equity collaboration pattern, agent-equity collaboration pattern, complementary-nonequity collaboration pattern, and agent-nonequity collaboration pattern. There are several findings: 1) when both parties have stronger complementary assets relationship, the transaction cost is lower and the relationship is more stable; 2) long-term partnership and timing governance mechanism reduce negotiation effort and facilitate quick time-to-market; 3) closer collaboration process can significantly reduce the errors in design project