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From the first time I was briefed about the Fab Owners Association in 2005, I have been intrigued by this addition to the world of industry groups.
The organization provides a forum for member companies' fab managers and execs---mostly from second- and third-tier semiconductor companies---to discuss shared manufacturing issues and challenges and come up with possible solutions as well as benefit from a "buying consortium" that collectivizes certain purchasing activities, thus lowering costs for members. Associate members come from the semi tool and materials supplier ranks, as well as service companies, other industry associations, and the like.
Since FOA made another announcement last week about adding to its membership rolls and concluding its most recent meeting in Dresden, Germany, I thought it was time to catch up with L.T. Guttadauro, FOA's executive director, and find out what the group has been up to. What follows are some of L.T.'s answers to my emailed questions.
What are the latest cooperative efforts undertaken by the FOA?
Currently, the most exciting cooperative effort is our collaborative purchasing programs. We have a series of preferred vendor agreements (PVAs) with Corporate Express, VWR, and CAE Online in place, where we can buy products or services at group discounts. The current major project is for wet processing chemicals. Based on our current discussions with chemical suppliers, we can save the members over 33%, if they take full advantage of the new, lower FOA negotiated base prices. This is millions of dollars in potential savings. We are also actively soliciting member’s inputs for consolidating OEM parts and service requirements, which will be offered for competitive bidding early next year.
Our standard cooperative programs (all of which are voluntary for members) include:
- Survey #1a–General Information: Basic technology, capacity, utilization information taken two times a year. This activity may result in a capacity-trading floor for members.
- Survey #2–Fab Equipment: Complete factory front-end equipment survey that helps a fab manager look for common equipment attributes, allowing managers to cooperate on used and spare parts sharing among members.
- Survey #3–Fab Indices and Metrics: Forty detailed fab metrics that provide a unique look at fab benchmarks. You cannot buy this level of detail.
- Survey #4–Pooled Purchasing: This has has resulted in the PVAs. We are looking at additional semiconductor consumables like gases and dry chemicals and more for 2007.
- Survey #5–OEM Parts Supply: Database of common needs and a commentary of best suppliers. Will result in a competitive biding program in 2007.
- FOA Trading Board: A trading board for capital equipment sales and purchases, giving the members an interactive marketplace for surplus assets commission free.
What are some of the outcomes of those efforts?
The obvious outcome is the ability to save, in terms of time, money, and effort. The beauty of a collaborative effort is that a collaborative can do more that any one individual company can do. That is why companies (and people) join collaboratives. Think Costco. We try to “save one penny per IC per year.†That is a lot of money!
A major nonmonetary benefit is the personal interaction of the participating managers. Member interaction is critical to the overall success of the organization. The ability to sit across the table from your peers to discuss items of common interest and get the level of experience talking back to you is unprecedented. This is the one of the most anticipated and valued items the member’s surveys have confirmed to us. Our associate members are key to our association’s success. They are the suppliers to the semiconductor industry, representing the latest information, products, and practices that provide substantial efficiencies for our manufacturing members.
What are some of the cooperative efforts in the planning stages?
Due to the confidential and sensitive nature of our plans, I cannot comment at this time, (other than) to say, it will be big. Alternatively, we will do what our members want: It is their association, not mine.
Are there any plans for cooperation in the green manufacturing arena, such as carbon trading or any other EHS-related work?
So far we have no active programs in the green manufacturing area. The biggest impact will be in assembly and test, (which) we will look at in 2007.
The association has grown significantly since its inception. Do you think there is a limit to how large the group can grow, a membership cap, if you will?
We have a managed growth perspective. We will add devicemaker companies at a manageable rate of about one new company a quarter. FOA is a nonprofit, international mutual-benefit corporation for semiconductor manufacturers and its suppliers. Member companies must own and operate a semiconductor or MEMS fabrication facility or be a supplier to our industry. Associate members are added all the time. We had two new members added last week: Silicon Services Consortium (Texas) and Babcock & Brown (San Francisco). (This) brings our membership to 15 devicemakers (we will drop LSI Logic in 2007) and 22 associate members..
Are there any specific attributes of the new members that bring something new and unique to FOA?
Each new devicemaker member brings personal fab perspectives and experiences that are both unique to him or herself and additive to the experience base of the collaborative. This is like building an infinitely expandable database of fab experience. It is for the benefit of the collaborative. (Sounds like the Borg from Star Trek!)
Any plans to expand the group's range of members, such as to FPD manufacturers or other thin-film head (HDD, etc.) fab companies?
We have our hands full with what we have. The device makers are a demanding bunch of managers. We cannot do enough, fast enough. So little time, so many fabs!
(A news feature about FOA from the MICRO Archives can be found here.)
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