PLM and growing community of fabless manufacturers

PLM and growing community of fabless manufacturers


There are so many interesting trends to watch these days in manufacturing. I’ve been blogging about Kickstarter projects and manufacturing startups. Another interesting topic to speak about is so called “fabless manufacturing”.

A bit history. Fabless manufacturing is not a new thing. Navigate to the following Wikipedia about Fabless Manufacturing to refresh your knowledge. Fabless manufacturing roots are going back to semiconductor manufacturing.

Prior to the 1980s, the semiconductor industry was vertically integrated. Semiconductor companies owned and operated their own silicon-wafer fabrication facilities and developed their own process technology for manufacturing their chips. These companies also carried out the assembly and testing of their chips, the fabrication. Meanwhile, with the help of private-equity funding, smaller companies began to form, with experienced engineers exercising their entrepreneurial prowess by establishing their own IC design companies focused on innovative chip solutions.[citation needed]

As with most technology-intensive industries, the silicon manufacturing process presents high barriers to entry into the market, especially for small start-up companies. So, Integrated Device Manufacturers (IDMs) had excess production capacity. The smaller companies began to take advantage of the opportunity- relying on IDMs to manufacture the chips they were designing. These conditions underlay the birth of the fabless business model. Companies were manufacturing integrated circuits (ICs) without owning a fabrication plant. Simultaneously, the foundry industry was established by Dr. Morris Chang with the founding of Taiwan Semiconductor Manufacturing Corporation (TSMC). Foundries became the cornerstone of the fabless model, providing a non-competitive manufacturing partner for fabless companies.

With latest development in global manufacturing, internet and 3D printing, we can probably see “fabless” model going beyond IC manufacturers. What was true for semiconductors, today is applying on other manufacturing segments as well. Many analysts and strategists these days are referencing developing of new forms of manufacturing as a next industrial revolution. Companies like Local Motors, Quirky and others are energizing community of developers to innovate and heavy outsource, or to be more correct – collaborate with fabrication and 3D printing facilities.

So, you can ask me – where it comes to PLM? Here is the thing. Such neo-manufacturing activity is obviously looking for software tools to support new type of collaboration between community of designers and fabrication companies. Most of existing PLM tools are focused on companies rather than on new type of manufacturing communities. Aerospace and automotive industries with intensive design and manufacturing supply chain can be a good reference of similar activities. But, very often, it serves a closed community or specific project/program to collaborate on. More radical changes needed. Recent turn of some CAD/PLM vendors towards cloud is a good starting point to change PLM collaboration model.

What is my conclusion? Manufacturing industry is changing. Companies are less vertically integrated these days. New type of manufacturing communities will require new design and collaboration tools to connect designers, engineers, suppliers and manufacturing into single connected eco-system. Just my thoughts…

Best, Oleg


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