Global chip foundry companies are enforcing stricter evaluation standards for requests from fabless companies for testing and production.
The stricter evaluation process was being enforced from the foundry companies are seeing unprecedented high demand due to the global chip shortage, people familiar with the matter said.
This has caused newer fabless companies, companies that design chips but doesn’t have their own production capacities, to find it difficult to secure production of the products they designed.
Foundry companies conventionally look at marketability, growth potential and productivity for the chips they are requested to produce by fabless companies.
The recently enforced stricter evaluation means fabless companies need more engineers and development time for their chips.
This is especially burdensome for newer companies, the people said, as non-engineering cost (NRE) is increased.
NRE includes costs for licensing fees of design IPs and electronic design automation (EDA), they said.
Foundry companies’ evaluation process usually takes three to six months for new requests.
They also need to alter their production processes to fit the recipe of a particular chip.
A person working at a global foundry company said the stricter evaluation processes are being caused by the global ship shortage and they needed to act carefully.