The semiconductor industry is currently facing a number of challenges.
The capital costs of IC factories and the cost of developing technolo
gy are increasing at a faster rate than the revenues. In addition, dem
and for ICs is fragmenting into lower volume and more differentiated m
arkets. The current chip manufacturing approach is establishing megafa
ctories for slow mass production of commodity products. To remain comp
etitive alternative design and manufacturing techniques will have to b
e developed with flexible factories for rapid production of multiple p
roducts in different technologies. At Stanford University we have buil
t a large interdisciplinary program aimed at exploring radically diffe
rent semiconductor manufacturing opportunities. The approach is to bui
ld a highly flexible computer controlled manufacturing facility - the
Programmable Factory and in parallel with this factory, a suite of sim
ulation tools the Virtual Factory which emulate all functions of the r
eal factory. Economic modeling suggests that such approach may offer m
ore economical small or large scale production, higher flexibility to
accommodate many products on several processes, and faster turnaround
to hasten product innovation.