Path: utzoo!utgpu!water!watmath!clyde!rutgers!cmcl2!brl-adm!umd5!purdue!i.cc.purdue.edu!j.cc.purdue.edu!pur-ee!uiucdcs!uiucdcsp!gillies
From: gillies@uiucdcsp.cs.uiuc.edu
Newsgroups: comp.sys.m68k
Subject: Second Sourcing
Message-ID: <75900004@uiucdcsp>
Date: 14 Feb 88 21:50:00 GMT
Lines: 33
Nf-ID: #N:uiucdcsp:75900004:000:1588
Nf-From: uiucdcsp.cs.uiuc.edu!gillies    Feb 14 15:50:00 1988


So what do you think about Motorola's decision to "go it alone" and
deny other manufacturers (Japanese AND American) the right to
second-source the 68020?

I'm not too impressed.  Motorola is trying to be like Intel.  It's a
longstanding tradition to second source ALL high-tech ICs to ensure a
smooth flow of working chips.  Otherwise, clean rooms get dirty,
masks slip out of alignment, sputtering devices break down, kilns
change their properties, and manufacturing is interrupted.  It can
takes days, weeks, even MONTHS to find the problem.  This KILLS OEMs
that depend on the chip.

Rest assured that Motorola can charge a $$$ royalty on every
second-sourced chip.  But the second-source manufacturer can innovate
in manufacturing, getting higher yield.  A $500 chip often costs $499
to build when it is introduced.  Motorola might get the cost down to
$200 after many months.  After that, where's the incentive to cut the
fat off the manufacturing cost?

If other companies are competing in manufacturing, the competition
might bring the manufacturing cost down to $20.  Then you might see a
$500 chip selling for $220.  I doubt this will happen with Motorola
(and Intel's) new snobby policy.

I think it's a great opportunity for the Japanese to penetrate the
market with 32-bit processor chips (clones, or genuinely new
processors).  It's also a great incentive for them to increase their
processor-design skills.  Intel & Motorola are just asking to be
manufactured out of business, by Asia.

Don Gillies {ihnp4!uiucdcs!gillies} U of Illinois
            {gillies@p.cs.uiuc.edu}