April 7, 2003 - San Jose, CA - The Fabless Semiconductor Association (FSA), a semiconductor trade organization, has announced the results of a joint research effort focused on identifying supply chain issues impacting fabless success. The Fabless Supply Chain Study was commissioned by the FSA and conducted by Lions Peak LLC and Santa Clara U.'s Center for Innovation and Entrepreneurship.

Based on interviews and surveys with fabless companies and foundries, the study confirmed that effective partnering and alliance creation are critical to determining the success of the value creation chain. Additionally, the research revealed that the design-to-manufacturing hand-off is the number one issue impacting time-to-market and competitive positioning success. Strategic demand management was also identified as the key obstacle to maintaining successful operations management in today's volatile electronics industry.

"Maintaining effective supply chain management has always been critical to the success of companies outsourcing a large portion of their manufacturing, especially fabless semiconductor companies," said Jodi Shelton, co-founder and executive director of the FSA. "This study demonstrates the vital nature of the supply chain for fabless companies, while outlining challenges faced by those outsourcing their manufacturing."

Some challenges outlined in the study requiring strategic and tactical considerations include: process technology complexity, synchronization with design tool capability, mask costs, and the emergence of 300mm wafer sizes.

"The risks and complexities of outsourcing are enormous. The strategic and operational supply chain dependencies are clear. Next-generation companies need next-generation methodologies and tools," said Pat Guerra, co-founder of Lions Peak LLC.