Strategic Management of Technology
450mm fabs are inevitably going to be built eventually, but as it stands today all firms with the capability to invest in 450mm have expressed intention to hold off, including Intel. Intel therefore has four options: 1) opt out altogether 2) allow another firm to go first and take on the R&D costs 3) run some 450mm fabs and some 300mm fabs until the 450mm fabs cost less to run or 4) fully invest in 450mm fabs right before any other firm. In this essay, a combination of reports by industry analysts, corporate press releases, and interviews conducted with three senior process engineers at Intel are used to support an analysis of the 450mm competitive environment and Intel’s opportunity to gain sustained competitive advantage. A Porter model analysis determines that for 450mm fabs the threat of substitution is high if the cost of running 450mm fabs cannot eventually beat the cost of running 300mm fabs, the threat of new entry is non-existent outside of the members of the G450C, the bargaining power of buyers is high after the initial ramp-up period of 450mm technology, the bargaining power of suppliers is highest in the beginning of 450mm adoption, and the rivalry of competitors does not exist until a second firm chooses to build a 450mm fab. Once the context is set for the 450mm environment, an assessment using the Resource-Based View of the Firm determines that the 450mm technology itself is not inherently a sustained competitive advantage, but the experience of Intel’s employee workforce would be if they fully adopt 450mm technology ahead of the competition. The essay is closed out with a brief discussion on how lessons from experience with previous wafer size transitions can guide the next one.
Khalil, Sammy, "Should Intel Invest in 450mm Technology? Determining the Competitive
Advantage of Fully Adopting 450mm Ahead of Other Firms" (2015). Engineering and Technology Management Student Projects. 193.