> With another company competing with the industry's biggies
> UMC, TSMC, IBM, Chartered, etc, how will Toshiba effect the
> industry as a whole? Are mask and wafers prices affected by
> competition?
For Toshiba, IBM, TI, Fujitsu, NEC, and LSI (and several others), the wafer-fab business is a business segment within the entire company.
TSMC and UMC are 'pure-play foundries', which means their entire (or majority) revenue comes from fabricating wafers for others. (Actually UMC owns a few chip companies, like Mediatek.) From what I have *heard*, TSMC and UMC offer the best piece/price (price per wafer.) Both foundry run very MINIMAL in-house design services (place&route, built-in-self-test circuitry), choosing to focus only on wafer manufacturing. TSMC and UMC are best suited for companies who want to produce an ASIC in large volumes (millions.) Both TSMC and UMC offer very similar product (in terms of process-line.)
The other companies I mentioned all run 'design services' for its customers. This can include back-end work (standard cell placement and interconnect routing), drop-in IP (intellectual property, like a DDR I/O cell or gigabit-serial block), full testing-automation (includes the built-in-test-circuitry and wafer probe service), and/or packaging (this is tied with the back-end work, because of the I/O cell placement.) To subsidize these service businesses, the customer's per/wafer-pricing is corresponding higher (compared to TSMC/UMC, IBM and TI charge 2.0X or more for a similar digital-logic process.)
Some foundries also offer 'exotic' (and expensive) manufacturing processes, like GaAs or SiGe (actually, TSMC and UMC also offer SiGe.) These are crucial for high-speed RF (radio frequency) circuits and specialized analog circuits, like 10gigabit ethernet, etc, but for very large digital ASICs, they aren't price-competitive with standard silicon due to higher defect rates.
Given a choice, and all other things being equal, I think customer will pick the choice with lowest cost. Aside from cost, there are other factories. For example, Qlogic and Emulex are both LSI customers, probably because of LSI's gigabit transceiver core. The availability of LSI's gigacore enabled both Qlogic and Emulex to simply drop in a transceiver macro (and not worry about its design/verification.) Currently, Qlogic is actively looking to switch away from LSI, due to LSI's entry into the SCSI market.
...
that said, the merchant foundry industry is currently in a state of 'over-supply' (too much fab capacity), obviously caused by the high-tech decline in the communications industry.
This is the opposite of year 2000, when both TSMC and UMC were turning out wafers at 100% capacity. Both TSMC and UMC had to turn away a lot of 'smaller volume' customers/
** EDIT **
A correction to a potentailly inaccurate/misleading statement -- "compared to TSMC/UMC, IBM and TI charge 2.0X or more for a similar digital-logic process."
IBM and TSMC have fundamentally different pricing-structures. TSMC delivers fabbed wafers to the customer. The customer pays per wafer. IBM (and many other merchant foundries) deliver packaged and tested chips (i.e. the wafer is cut, the individual dies are tested, and only the good ones are saved for packaging and final delivery.)
From a business standpoint, TSMC's customers share a great deal of manufacturing risk. Whether a production run has high yield or low yield, the customer pays the same fixed rate. IBM shoulders most of the risk by delivering only known good dies.
With either business model, profit maximization occurs with high manufacturing volumes of a single design. In other words, "1 customer who orders 9999 wafers" is better than "9999 customers who each order 1 wafer." So don't think for a second that TSMC doesn't care about its customer's wafer yields -- TSMC profit is just as dependent on prolonged (and successful) production runs as IBM's.