Travelling On The Silicon Road

There has been a lot of talk recently over the blogosphere (& elsewhere!) about the changing face of EDA, EDA is doomed, EDA needs to change its biz model in order to survive etc.
What needs to be kept in perspective is the evolving value-proposition & risk sharing perceived by the chip designing company from an EDA vendor’s offering; especially in these times of the escalating costs (and diminishing success rates) of  chip designs in the higher technos.
I see the following path for the EDA vendors

• EDA vendors’ offering to be more service oriented and I do not mean tool based trouble shooting here.  

• Point tools across EDA vendors are losing their differentiation but are essential for basic design flow. I do not see chip vendors getting into developing these.  

• EDA vendors will partner for point tools. These tools will evolve as per market requirements and be available on a pay-per-use model and bolstered by cloud computing.  

• As a service, EDA vendors will closely work with the chip developers to see the project from specs to manufacturing. This is the service part of the tool+ service offering of the EDA vendors. The major chunk of the EDA vendor’s revenue will come from this service part and this will be the deciding criteria for the EDA vendors’ ranking in the chip designing world.  

Recommend a couple of interesting articles

What EDA needs to do to start growing again and Cadence goes two-dimensional

I had mentioned about technology fitting serendipitously in developing countries in an earlier post. Just came across this news item which shows yet another use of a consumer device for an unintended but highly useful application.

Pediatric eye surgeons in India and elsewhere find that the iPhone’s security and features makes it the best platform to be used in tele-opthalmology to cure Retinopathy of Prematurity (RoP). An Indian eye hospital is piloting software that will push retinal images collected from patients in remote locations to the doctors’ iPhones. They can then quickly send their diagnosis and recommendations from their iPhones to the doctors in the location nearest to the patient. Laboratory assistants take pictures of the retinas of prematurely born babies and transmit them via broadband to pediatric eye surgeons, who could be hundreds or thousands of miles away.
It is envisioning of applications like these that will help to bridge the digital divide

Read an interesting article in the latest edition (Oct 26) of Fortune magazine. It is “An App store for autos?” written by Michael V. Copeland.

As mentioned by Malcolm Penn of Future Horizons in the IEF 2009, “The ‘A’ word is back on the agenda”,
 

But it is not all smooth sailing for the foundry biz. The semiconductor industry’s capex has hit alarmingly low levels. The normal ratio of capex to sales over the industry’s history is 20%. Last year it was 12% and this year it will be 4%. The industry’s overall capacity is now 14% less than it was in Q3.’08. With the economy and market’s forecasted recovery, foundries will be hard pressed next year to meet the demands.
 

And that is where the “C” word comes in – Collaboration and Consolidation.
 

There has also been a lot of talk on consolidation in the foundry biz – as in other areas of the semiconductor industry. There are some pending mergers - between Hua Hong NEC and Grace Semiconductor; Tower Semiconductor’s 2008 purchase of Jazz Semiconductor, proposed acquisition of HeJian Technologies by UMC and the recent purchase of Chartered by GlobalFoundries.
 

Possible future mergers are: SMIC acquiring Cension Semiconductor Manufacturing International and Wuhan Xinxin Semiconductor Manufacturing - two companies which SMIC is managing. And then there are small foundries like Silterra, Altis and Landshunt which are struggling and open to speculation regarding a merger with another manufacturer.”
In all likelihood, as cited by iSuppli, there may be 3 major pure-play foundries left standing after the consolidation – TSMC, UMC and GlobalFoundries.

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Intel will port unspecified Atom processor cores to TSMC’s technology platform, including processes, IP, libraries and design flows under the terms of an agreement between the two companies announced yesterday.
 

The deal will expand the TAM for Atom. It allows TSMC & Intel to go after newer market segments together - namely the embedded, CE, netbooks and handheld market.

Some interesting highlights on this deal:

• It is indeed a rare event for Intel to allow its processor to be manufactured by another company.
• Intel has no plans to license or transfer its high-k process to TSMC. It is doubtful the TSMC Atom devices will include high-k and metal gates. Hence it’s unlikely that the core from TSMC will have the same performance level as that from Intel.
• With PC shipments failing, Intel needs to aggressively penetrate into other markets.
• Intel goes head-on with leading embedded core provider, ARM. While ARM is trying to move to larger devices (from handsets etc.) for its cores, Intel is moving in the opposite direction (PC to smaller devices)
• We may see two strong foundry-IP camps emerging: ARM-IBM alliance and Intel-TSMC for the much sought after mid size converging devices in the embedded space.
• Point to be noted is that while there are 2 different market segments for the processor – higher end processors for PCs and the lower (& cheaper ones) for MIDs, Intel will need to do a real balancing act here so as not to have its profits from the upper segment being eaten away substantially by the lesser profits of the lower end processors.