Use Case
Gaining Transparency into Supplier and Competitor Costs with TechInsights Semiconductor Manufacturing Economics
Procurement professionals and product directors responsible for sourcing wafer capacity at foundries or managing IC sales at fabless semiconductor companies purchasing more than $100 million per year in commercial ICs, will be able to realize a potential revenue gain of over $1 million per year using TechInsights Semiconductor Manufacturing Economics.
The Challenge
Although the prices foundries charge are well known, a foundry’s internal costs behind quoted pricing is unknown to fabless companies. This is especially the case for “leading-edge” IC fabrication using EUV lithography in newer fabs where the capex depreciation dominates internal costs. The result being diminished negotiating power for fabless companies, leaving them unsure of if they are being quoted a fair price by their foundry partners. When it comes to competitive benchmarking for fabless companies, internal costs for competitors are also difficult to estimate, so competitive profit margins are guesses, making benchmarking a challenge.
The Solution
TechInsights IC Cost and Price Model and Strategic Cost and Price Model give users transparency into the internal costs of foundry partners, along with the purchasing-volume-based pricing. These models also provide fabless companies with the ability see competitors’ internal costs by allowing users to simulate backwards and forwards in time , enabling fabless companies to understand what their competitors profit margins are and to be able to negotiate long-term supply contracts with foundries and OSATs.
The Results
Fabless companies globally have harnessed the value included within TechInsights IC Cost and Price Model and Strategic Cost and Price Model to add $1+ million per year in revenues based on raising ASPs and gain over $10 million per year in product sales by taking market share from competitors with aggressive pricing while maintaining acceptable profit margins. A fabless company has the potential to gain $1-5 million per year in revenues with TechInsights’ Semiconductor Manufacturing Economics through strategic pricing.
This use case outlines how TechInsights analysis can also help your company.
Working closely with our customers we provide a detailed breakdown of analysis related to their specific requirements ensuring we are a trusted partner in their continued focus on quality and execution.
Enter your email to register to the TechInsights Platform and access analyses, daily content updates, and more.
