An Exploratory Study on the Evolution of Collaboration Models between Foundry and its Design Service Company

After six decades of industry development, of which half of the history closely related to Taiwan, semiconductor industry indeed achieved a phenomenon growth and significant accomplishment in the world. Especially, the rise of foundry-fabless model in the 2nd phase of semiconductor industry evolution has significantly changed the industry landscape. The top two foundries, Taiwan Semiconductor Manufacturing Corp. (TSMC) and United Microelectronics Corp. (UMC), have occupied more than 70% of the global foundry business. However, the development gap between process development and IC design technique is getting widened more than ever. The SoC (System on Chip) has been considered as one of the most effective solutions to narrow the gap. The core concept of SoC design is to create platform which serves as building blocks and facilitates finishing a complete plan of IC design at the system level. To enhance the effectiveness of design and manufacturing processes, the cooperation between foundry and its captive design service company becomes a critical factor of success. The primary purpose of this thesis is to undertake a longitudinal case study on the evolutionary development between foundry and its design service partner, upon which investigation propositions regarding future collaborative models and industry policy are based.n essence, the collaborative relationship between foundry and its design service company is a progressive evolution. The two pairs studied in this thesis, namely tsmc-GUC and UMC-Faraday, had totally different development paths because of their different strategic thinking. With the notion of Relationl View and the conceptualization of dyad relationship, we identify driving forces of progressive collaboration and strategic purposes of each phase. We take foundry as the focal firm to recognize the driving forces, influencing factors and competitive advantages through comparison and analysis between/within dyads and figure out relational rents they produced. Our paper discusses four main driving forces and two influencing factors underlying each force. We submit totally twelve exploratory propositions based on above conceptualization and logic inference, with which we expect to interpret the developing trend of industry and suggest strategic directions.