IBM MICROELECTRONICS JOINT DEVELOPMENT ALLIANCES

Group 5

Agenda

How does the shared innovation model work at IBM? Are there particular aspects in the choice of partners that are important in the success of the model? What are the implications for industry structure & how competition might evolve due to the above approach?

Industry structure

Designers Fabricators IDMs Fab-lite and Fabless

Industry Outlook

Industry Economic Equation:

Production

Yield of a good Die and Physical size of each Die

Shift from Vertical integration to horizontal ecosystem of specialist Design rules and process standardization Modularizations Heavy investment industry Increasing pressure from Japan industry

Challenges to Designers

Technology obsolesce Heavy investments in R&D Dependencies on Fabricators Fabricators need to keep pace with designers in terms of process enablement

Implications for Industry structure

Industry Structure Implication of structure & challenges Environment for collaboration Effect on competition

Innovation model work at IBM

IBM Radical Collaboration Model Presence of group in value chain Benefit & Challenges Partner selection criteria

Innovation model work at IBM

IBM Radical Collaboration model was an innovative approach to

addressing the huge R & D investment and capital that are necessary to
remain competitive in the global semiconductor industry. This model requires a rethinking of what is proprietary and what is common, and

where the boundaries of the end of the cooperation and competition

begins. IBM and its partners have managed to remain competitive, for example, 45 nm node, at a much lower cost than the firms that alone, and there is great benefit from the large funnel ideas and different points of view. It also changes the shape of that firms can use to create a competitive advantage, or it requires rethinking the very least

The mantra

The strength of the team is each individual member. The strength of each member is the team.

Challenges and Issues

Sharing of resources and efforts Sharing of IP and proprietary knowledge Governance issues Cultural issues

Thank You