7th November 2014

New blog

Have finally got around to moving to an updated backend/infra database. Will be posting all my subsequent blog posts from here. Have titled this as Travelling on the Silicon Road - Part 2. I plan to write more on management and strategy issues with specific insights to the semiconductor world in this blog.

posted in Semiconductor, Business, Management & Strategy | 0 Comments

3rd November 2014

Are you capturing enough value on your innovation?

Read an interesting article, “Capture more value” by Stefan Michel in the latest HBR issue (October 2014). The article talks about how companies while putting in efforts in value creation often lose focus on value capture, thus leaving money on the table. It describes 5 different innovation categories in value capture – Changing the price setting mechanism, changing the payer, changing the price carrier, and lastly changing the segment.

Value Capture

Most of us in the semiconductor industry would confess to be “techno snobbish “. Working at leading edge technologies and in the scaling race, we often miss out the salient point – customers want technology benefits and not technology per se. While we are steadily moving towards treating the hardware chips and systems as modes for creating value and not just solely numbers in nanometres, we have a long way to go in exploring various possible and often innovative ways on how we can optimally leverage the value we create. Value capture is sadly under prioritized.

Let me take a few examples on some varying stages of value capture in this industry…..

Capturing value by changing the price setting mechanism:
The idea is to set the price according to the product’s value or worth to the customer. Memory (DRAM and NAND Flash) pricing is a good example here.

Changing the price carrier:
Price carrier is what the seller is hanging the price tag on. Semiconductor IPs is a good example here. IP vendors have evolved their IP strategies from treating IPs as fillers for differentiating hardware sockets in a system towards ensuring that the IP works not just as an isolated unit but also in the complete system. It subsequently evolved towards IP plus services and then is moving towards offering the customer a complete IP (hardware, services, software) platform solution. The price tag has moved from the die space to differentiating value provided to the customer and then the complete valued package. Bundling and unbundling of various EDA licenses is another example where the EDA company is changing the price carrier.

Changing the payer:
It may not always be the case that it is only the consumer of the product/offering who pays for the value he receives. Like in some media where content is offered free to the public, the costs are shared by the advertisers. An example I see here is that of Qualcomm’s push to the China fabless design houses to design using its cores. Am not sure of the veracity of this but understand that in China, Qualcomm recovers its IP royalty not from the design houses there but from the system houses which use the design solution (with the Qualcomm core) from these local design houses.

One of the potential big biz for us is in the Internet of Things….. and it is especially in this space that the semiconductor industry needs to think hard and differently from its traditional value innovation and capture strategy - if it doesn’t want to be left out with just a fraction of the pie. I will do a separate post on this shortly.

Do you see other examples of value capture in your industry? What is your opinion on this? Would be keen to hear your ideas and perspective on this.

posted in Semiconductor, EDA, Business, Hardware, Management & Strategy | 0 Comments

28th April 2014

Mobility and IoT - and its impact on the semiconductor industry

I attended the Semicon 2014 last week here in Singapore at the Marina Bay Sands – after a self-imposed hiatus of a few years. I attribute the hiatus to Semi charging people to attend its industry tracks. I do realize that they too have to make a bit of money to sustain but then it is always tough to pay for an event once you get used to participating in them for free for some years! Anyhow, as I was chairing a session on the Fabless/IDM Technology Challenges track in this year’s event, I had free access to all its tracks and especially the market trends as well as the networking cocktail event held on the first day. The market trend has always been a big crowd puller for Semi and this year was no exception.

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Anyhow, let me talk here about the Fabless/IDM track. This was co-organized by SSIA (Singapore Semiconductor Industry Association) of which I happen to be an executive committee member, along with Semi.

The theme of this track was “Mobility and IoT - and its impact on the semiconductor industry “. The growth has been quite rapid in this space especially now in the IoT one. The potential market is huge, is fragmented and with low barriers to entry and no major competitors/players (as yet) – a conducive backdrop on Porter’s five competitive forces shaping industry competition. Unlike the smartphone market which has evolved into a cut throat biz dominated by vertically integrated players, the IoT looks set to provide a refreshing levelling impetus.

We are looking into some exciting and innovating market opportunities in this space, especially on the IoT front. Apart from the potentially high growth applications markets that this opens up for the semiconductor industry, the underlying fabric of our industry is also seeing transformation at various levels including the increasing inter dependency and synergy across the various entities in this eco system. These emerging application markets and morphing industry ecosystem bring along several interesting visions and opportunities as well as new challenges. So it was with a lot of excitement and quest for knowing more on this aspect that I was looking forward to chairing this session and especially more to moderating the panel discussion following the presentations. And of course, the great speakers and the panellist line-up fuelled this up.

The speakers included Vincent Tong, SVP, New Product Introductions and Worldwide Quality & Asia Pacific Executive Leader, Xilinx, Greg Turetzky, Strategic Business Development Manager, Wireless Communication Systems Group, Intel, Jennifer Teo, VP of Manufacturing and GM, Silicon Labs International and Giuseppe Miano, VP Asia Operations and MD, Broadcom, Singapore. Vincent’s talk dwelled on IoT requiring advanced SoC with differentiation as a key i.e. differentiation with intelligence and flexibility and hence programmability. Greg spoke about ubiquitous location for all mobile platforms, the opportunities and the challenges. The market opportunities have expanded from GPS to GNSS and now to location with the latter being the next big opportunity – always located and with context. Jennifer talked about how IoT is being a game changer and dwelt on the technologies required for the “things”. Giuseppe spoke about the 3rd wave of wireless connectivity – from connecting to consumption to sensing (and controlling). Have added another acronym to my vocab – BYOW (Bring your own wearable) – and must say I find that cool! He also spoke about the favourable market dynamics driving the growth as well as the aspects that need to start being considered especially on the manufacturing, logistics and suppliers side.

The panel discussion following these talks centred on “Harnessing the power of Mobility and IoT – perspectives from the semiconductor industry”. The panellists included the earlier speakers and
Subramani Kengeri, VP, Advanced Technology Architecture, GlobalFoundries and Francis Puno, Chairman SEA Work Group of Continua Health Alliance.

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With stake holders from across the value-chain – IDM, fabless, foundry, application – the panel stirred up a lively and insightful debate. While the insights were quite forthcoming on my questions regarding the technical and even the ecosystem enablers, there was almost a conspiratorial silence from the panel on my query about the biz models they anticipated to develop or emerge with IoT applications. As they said, everyone is holding their cards close to their chest!

It was an insightful and a highly engaging session where all the speakers and panelists spoke passionately about this industry. And that is always heartening!

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posted in Semiconductor, Business, Fabless, Industry Events, Ecosystem, Market trend, Internet of Things, IoT, IDM | 0 Comments

21st May 2013

How will ST’s new two product oriented business segments organization strategy pan out?

Georges Penalver, chief strategy officer for ST, told the analysts community recently that ST is being constructed as two product-oriented business segments organization. The first block encompasses ST’s sensor, power and automotive products and is essentially ST’s successful analog business and its digital automotive business. The second block is ST’s embedded processing business and is the non-automotive digital business including microcontrollers and processors for digital consumer applications.

 

Focusing on the Embedded processing segment and ST’s manufacturing strategy, let’s look into some statements from the earnings call last month:

·       The 1st segment i.e. Sensor, Power & Automotive represented 56% of net revenues and the 2nd segment (Embedded Processing Solutions) 44%

·       Wireless saw a significant decrease due to ST-Ericsson and this will continue. LTE Modem development activity and biz has moved to Ericsson

·       ST will not compete in the application processor market in smartphones

·       Microcontrollers are a key driver in the Embedded Segment; the others are STB (set top boxes), TVs, digital ASICs, Imaging etc.

·       ST will focus on 2 segments in Microcontrollers. The first one is wearable electronics (healthcare, automotive, gaming) where it caters to diverse and small size customers (requirement is for low power microcontrollers, sensors and connectivity). The second one is secure microcontrollers (which is more for smartphone applications (NFC), banking - both contact and contactless) catering to a smaller number of customers but for a likely high volume

·       Digital biz will be in 300mm wafer fab in Crolles

·       Manufacturing distribution in Crolles: 1/3rd each into MCU, CMOS image sensors and dig consumer products

·       ST is betting big on FD-SOI tech. It has second source agreement with GlobalFoundries for selected customers for this techno. Here it is working aggressively on 2 fronts – 1st is communication infrastructure where low power dissipation is important along with strong performance. The other is portable equipment (outside smartphones, tablets)

 

Add to that the fact that the major semiconductor growth (last year and projected this year too) are the mobile consumer devices especially smartphones and tablets as well as the wireless communication sector.

 

Keeping the above in mind, it will be a big challenge for the company to support leading edge technologies in Crolles and that too with an allocation of a third of its capacity for digital consumer products – case of an expensive leading edge digital technology without targeting aggressive margins. So, how ST can keep its IDM model, especially on the leading digital edge with this kind of a product segment organization strategy, economically viable – that’d be interesting to watch.

 

What are your thoughts?

posted in Semiconductor, Business, Foundry, Communciation, Blogroll, Technology, MIDs, chip design, connectivity, Mobile, STM, IDM | 0 Comments

1st April 2013

My analyst series - Qualcomm (QCOM)

Another one on Qualcomm (QCOM)

Lead in mobile integrated chipset and wireless – Snapdragon series, wireless technology patents/licensing
Announced CMOS Power Amplifiers alternative to GaAs PAs for mid-high tiered 3G/4G smartphones

China market focus
- Well positioned to ride on China Mobile’s LTE wave (China Mobile announced spending $6.7b in 4G tech this year)
QCOM chips were in 14 of the 31 terminals selected for trial by China Mobile in Dec ’12 - nearest rival with 4 was Sequans.
- Biz model with local mobile chipset design companies and the system/handset manufacturers for licensing royalties

Major Revenue segments – licensing and sales
While in the last couple of years, QTL’s revenues were higher than that of QCT, QCOM is looking at double digits growth for both biz segments and QCT’s growth to be substantially higher than that of QTL.

Strong focus & investment in R&D
R&D in Q1 fiscal 2013 was 1.1B (18% of revenues)

Vertical integration for mobile eco-system
- Accelerating the commercialization of its Pixtronix MEMS displays using Sharp’s IGZO tech – Note however that the deadline for giving Sharp the 2nd half of $120m investment from QCOM has been extended now to June (due to some specs conditions not being met by Sharp)
- Ride on Internet of Things: Amongst others - Alljoyn and FlashLinq
- Moving beyond devices into wireless backhaul – DesignArt acquisition last year

Strong Financials
- Q1 ’13 earnings: $6b quarterly revenues (a 29% y-o-y increase), $1.91b profit (36% increase over previous year)
- Full-year revenue guidance to a range of $23.4 billion to $24.4 billion from its previous target of $23 billion to $24 billion.

posted in Semiconductor, Business, Fabless, 3G, Qualcomm, Ecosystem, Internet of Things, IoT, chip, connectivity, Mobile, 4G | 0 Comments

28th March 2013

My analyst series - Intel (INTC)

Going through some of the equity research notes, apart from the contents, one of the things that struck me the other day was the brief succinct way the main content is put out. And so, I thought, why not do a series with my take on some of the stakeholder companies and application markets in the semiconductor eco-system. Appreciate your feedback, comments, thanks!

So here goes the first one…

Intel (INTC)

Intel’s technology lead
- Pros: Increased capex to maintain the lead (at least 2.5 years ahead from competition), Intel’s stake in ASML for 450mm and EUV R&D
- Cons: The increased capex that could also result into high end fabs running under capacity. Intel needs to monetize its leading edge technology and also needs numbers and breadth of various types of chips to be fabricated in its fabs in order to fine tune its processes.
- As per IC Insights, Intel’s forecasted capex for period 2010-2013 is $40b, second to Samsung’s ($46.9b) – together to account for 42% of the total industry

Intel’s foundry principle seems to be - Open Intel fabs for non-Intel chips but not for competing chips (“chips for mobile biz”). Altera deal is seen as step forward. However, point to be noted is that while (reportedly) this deal does not allow Intel to let other FPGA vendors (Xilinx?) on its 14nm fabs, Altera can still continue to work with TSMC and others. Second source foundry options may not reel in 100% of Altera’s total fab requirements to Intel

Semiconductor growth drivers and Intel’s market share in it
- Slowing down/Cannibalizing of PC biz (Intel’s main revenue generator)
- Mobile chips being the major driver now for semiconductor growth and Intel’s not too effective efforts till date in this space.

• However lately, we are seeing Intel making good in-roads in this space. Mobile biz requires connectivity plus good power management solutions besides the performance factor. Two announcements from Intel this year point positively in this direction – Dialog deal (for power management in its Bay Trail (22nm)) and XMM7160 (multimode, multiband 4G LTE global modem solution) for an integrated SoC solution end 2013/early 2014.

posted in Semiconductor, Business, Technology, Intel, Ecosystem, chip, connectivity, Mobile, Power | 0 Comments

14th February 2013

Internet of Things (IoT) and the opportunities for chip biz

There has been a lot of talk on Internet of Things (IoT) or Machine2Machine (M2M) communications – which basically is an intelligent grid of devices connected to each other through the internet. Chips are embedded in the devices enabling them to relay information, take decisions, communicate commands and adjust settings/implement a requisite action(s) accordingly.

As per a report from ABI Research, over five billion wireless connectivity chips will ship in 2013.

What does this mean for the chip biz?

Some basic things that various devices involved in this IoT will include are: wireless connectivity (mostly low power unless one or more of these devices is connected to the mains), sensors, MEMs and control units.

The control units here needn’t be too fancy – efficient and sufficient enough to do the task they are assigned for. They span from low end to high end depending on the computing power required for the control functions - served by MCUs, embedded processors. The sensors (for temperature, pressure, moisture, light etc.) are coupled with accelerometers, gyroscopes and the like.

Connecting to the internet – wirelessly and power efficiently – that will be the key for connectivity stake holders in this space. Nuel has come up with an interesting way to achieve this. It recently announced a white space (unused frequencies during TV channels’ transmission) radio chip for low power communications and come out with a chip to demonstrate the same (it implements the “Weightless’ specifications)

One thing I find interesting about IoT/M2M is that it does not have any defined market space/application. There are potentially several applications, several markets where these can find their way. So, while one can chose to specialize in servicing one market/application, a choice of providing a generic chip/platform (control/sensor/connectivity) for any or combination/integration (SoC) of the components of the basic fabric for any (or at least most of the applications) is also wide open.

However, for the application to catch on, it has to be implemented in an inexpensive way and should be easy to use - and that is where we’ll see some exciting innovation & integration happening

posted in ASICs, Semiconductor, Business, Communciation, Technology, Hardware, Ecosystem, chip design, Market trend | 0 Comments

15th January 2013

Some promising application markets for semiconductor biz in 2013

Communication and Consumer Electronics appear as the most promising application market segments for 2013. And within that, portability and wireless connectivity are set to be the main growth drivers for the semiconductor industry.

The other promising markets for 2013 are automotive and medical.

Portability has brought in an increasing importance of power management. Demand for power efficient and high performance solutions in portable devices will continue driving the need for power management ICs - and these represent a significant part of revenues from analog IC vendors.

The rapid growth of wireless applications and the incorporation of computing into communications (e.g. smartphones) and vice versa (e.g. media tablets) is likely to continue in 2013. While smartphones have been the main growth driver in the wireless application, the market also includes all semiconductor content needed for communication infrastructure, equipment etc. The proliferation of 4G, an increasing use of fibre coupled with an increasing data traffic need will catalyse this application market segment. In addition, semiconductors have proliferated beyond the traditional wireless and computing applications, e.g. mobile commerce.

The rise of M2M communications/Internet of things will also provide long term opportunities for wireless communication chip makers. These will span a broad range of applications across automotive, industrial etc. Intelligent, connected, and energy-efficient systems (with sensors and motors being wirelessly connected) will continue leading to higher semiconductor content.

The increasing sophistication of the mobile devices has led to not only increasing semiconductor content but also its varied usage. The traditional content of baseband and RF has morphed into multicore application processors, connectivity supporting various spectrum bands, sophisticated graphics and video, touchscreen displays etc. And the tidings will cascade across the complete semiconductor supply chain supporting these applications. This includes market for components like sensors, displays, power management, MEMs etc.

2013 will also see MEMS becoming a part of mainstream semiconductor content. From gyroscopes, accelerometers, and microphones, they are finding an increased penetration into devices spanning multiple industries and applications – consumer electronics, mobile devices, medical, automotive, aerospace etc. Its growth will be seen through an increased on board processing and integrated and self-contained sensing units.

On sensors, Internet of things is also likely to drive a huge market for low power, cost sensitive sensors. Innovations here are also reshaping the medical imaging industry. While this market is currently evolving, the emerging technologies and products in this space are likely to go main stream with a high potential.

Medical electronics is another promising market for semiconductor. The increasing aging population, increased life-span and various life style related illnesses are spurring the demand here. Medical devices now warrant small and smarter technologies – coupled with wireless connectivity.

Automotive has also seen an increasing amount of electronics. Automotive infotainment, safety, fuel efficiency and enhanced features is making this application market very promising for semiconductor content

posted in Semiconductor, Business, Forecasts, Analog, Automotive | 0 Comments

3rd July 2012

Fab Power

Looks like the scaling down road for fabless – foundry model is getting bumpier. First the high cost of setting up new fabs made the earlier IDMs get into the fab lite model – i.e. depend upon the pure play foundries for the basic process capacity and do the specialized process add-ons in-house to get the competitive advantage. The fabless companies too coupled with pure-play foundries and gained prominence. The industry seemed to have found a way out (at least temperoraliy) of the high cost challenges of scaling down coupled with the issues of designing multimillion gates chips with increasing features and decreasing time to market window.

But now the speed breakers on this road are getting frequent and higher. Take the last couple of examples. FD-SOI is one of the new transistor architectures thrown up by ST/ST-Ericsson for scaling down 28nm and below. The process is reported to give a 35% power performance gain and that too by a simpler process transition from the typical CMOS. But ST lacks the capacity and hence is exploring options with GlobalFoundries. The latter is reportedly insisting that it will use ST’s process to make parts for all other parties too, in exchange for this extra capacity – leading to ST/ST-E potentially losing on a big competitive edge of sole access to a proprietary process through its FD-SOI process.

The second recent example is of Qualcomm. The world’s largest fabless company uses TSMC‘s 28nm process to manufacture its Snapdragon S4. And the world’s largest pure play foundry has had yield/capacity issues on this node.

TSMC’s 28nm foundry capacity woes have put a dampener in the presently exclusive run of Qualcomm – the sole (at least presently) provider of integrated multimode 3G/4G LTE baseband chips. And it ripples further down the chain causing distress to LTE smartphone vendors. Shortage is not expected to cease before Q4’12. Qualcomm is now planning a 23 per cent increase in operating expenses this year and looking for alternative (apart from TSMC) suppliers. It’s CEO Paul Jacobs’s recent visit to Samsung, reportedly for discussions that included semiconductor supply as well as his comment of not ruling out owning the means of chip production has led to a lot of water cooler speculation.

Incidentally TSMC’s sales hit an all-time high (9.1% annual revenue growth) in April’12 – with much of the strong growth attributed by 28nm demand!

So where does this leave the fabless-foundry model? And how does this affect the IDMs?

One thing for sure is that the model will need to be tweaked in order to stand up to the sub 28nm/20nm challenges. Some pointers:

• Cost advantage of scaling down is diminishing for the foundries. The cost-per-transistor has been about 29% per node leading to cheaper scaled down chips. 28nm and sub has seen that levelling off for the foundries. Intel still has a big (at least a couple of years) lead in the process race. If the fabless companies do not see a steady decline in the cost-per-transistor in their foundries’ scaling, it certainly puts a spoke in their continuing down on the scaling path with this model.

• The prohibitive high cost of setting up a new fab and the related R&D and yield challenges just does not make sense for a fabless company, even Qualcomm, to start one. Owning a pre-planned and negotiated capacity or even production means with an existing foundry – yes but a fab from scratch, no, that doesn’t appear to be a viable option.

• With the increasing yield issues at smaller geometries pitched along with capacity shortage and uncertain market demand, a stronger vertical integration of supply chain may become the order of the day to sustain the fabless model – one which accounted for $64.9 billion in 2011. While expecting to resolve 28nm capacity shortage by Q4, TSMC has raised this year’s capex 42% to USD 8.5 billion to ride the market opportunities.

• Rewinding to one of my earlier blog posts (Jan 2008), I had cited a remark by Infineon’s CEO, Ziebart in an interview to EE Times’ rick Merritt, “The major thing giving semiconductor makers a competitive advantage has evaporated. Today everyone has access to the same process technology at roughly the same time. This access used to be what differentiated the best from the worst semiconductor companies, but now it has evaporated, What’s replacing process technology as a differentiator is systems know how, and it must be specific to a market area”. My comment to that, as also mentioned in the same post, was: Yes, the differentiator has moved from process technology; but it is due to access to the process techno. This access has become cost prohibitive for any single semiconductor company (perhaps leaving aside a couple with really deep pockets) and hence the scramble to find an alternate place in the value chain to survive.
That access to the process techno is now morphing, if not under threat.

• GlobalFoundties’ SVP Mojy Chian mentioned that “New challenges at 20nm and beyond will require deep, IDM-like collaboration to accelerate the time-to-market”. Now, does this mean that foundries will transition towards virtual IDMs?
Rewind to another earlier blog post (Dec 2007): “Over the last couple of years, we have seen IDMs going towards fablite and fabless models, and the emerging dominance of the original pure play foundries. I say “original” as lately these foundries are paving their way into newer territories like climbing up the design support value chain by increasing their IP portfolio, collaborating with EDA vendors for providing yield related data/information to the designers and reference design flows, and others – just short of coming up with their own ASSPs. So will we see the re-emergence of real IDMs albeit in the form of a morphed foundry??
IDMs, foundries, fabless… they are all morphing from their original identities and are reshaping the industry with their redefined (work in progress) grey and diffused boundaries

However, one thing stands tall amidst all this and that is “The “Fab power’ is increasingly getting honed into the semiconductor eco-system lately.” Fab matters

posted in Semiconductor, Process, Business, Foundry, Fabless, Technology, Samsung, Qualcomm, Intel, Ecosystem, chip design | 0 Comments

25th June 2012

Mediatek’s offer to buy MStar

Two compatriots for long at loggerheads have decided to join forces and take on the competition. News about Taiwanese chip designer MediaTek’s offer to buy rival MStar has created quite a buzz and water cooler speculation…. and of course the stock market. MStar was up 6.85 percent (maximum allowed in a session), while MediaTek gained 2.37 percent today.

My two cents’ worth addition to the buzz …..
- This acquisition will create the world’s fourth largest chip designer with total annual sales of US$4.2 billion in 2011

- The combined entity will have an almost 70% market share (a monopoly position??) in the TV SoC biz (DisplaySearch’s Q4’11 data put the two companies’ combined market share as 68.8%).

- Combined R&D resources and not looking over the shoulder for price cutting competition from the previous arch rivals can potentially sharpen the focus and product offering

- On the mobile phones arena: High end 3G smartphone chips along side the 2G ones for feature phones will consolidate & expand MediaTek’s mobile phone chip offering, especially in the emerging markets – more so in China where it has seen its once dominant position threatened by Spreadtrum and the likes (incidentally, MediaTek recently lost a TDSCDMA/WCDMA 3G chip socket in Samsung smartphone to Spreadtrum)

- And most importantly, it positions MediaTek well in an increasingly connected device market. With the growing convergence across platforms – TV, mobile phones, tablets/computing devices – it is crucial to integrate the relevant technologies across them so as to optimally and cost effectively leverage the same across the various platforms (Qualcomm announced a new Snapdragon for smart TVs and set top boxes in CES early this year and then at Computex later, it demonstrated its Smart TV reference platform with its quad-core Snapdragon S4 APQ8064 and MPQ8064 playing games and slinging TV frames. In E3 ’12 (Electronic Entertainment Expo), Samsung’s Smart TV included access to Nvidia’s new cloud gaming platform, GeForce Grid. Marvell too showcased its total solutions across Smart TVs, cloud computing and connectivity at Mobile World Congress)

- Concern: Talent retention/Integration of the combined work force. With almost 80% of MStar’s engineers doing the same work as folks at MediaTek, how will the parent entity avoid overlapping resources and address the potential loss (if not exodus) of talent?

posted in Semiconductor, Business, Communciation, Fabless, Industry Events, Mergers & Acquistions, 3G, MIDs, Samsung, Qualcomm, MediaTek, Spreadtrum, MStar | 0 Comments

20th April 2012

Chip designing and the cloud

One way to look at how chip designing can leverage from cloud computing is to look at the main benefits of cloud computing and project the same onto IC design. Obvious ones here are on demand access to computing power and data storage in a scalable mode. It is a capex to opex biz model.

 

Another way of looking at is to see what are the major challenges facing an IC designer and see how cloud computing can help. I personally find the second approach as one which if addressed properly will provide much compelling reasons for the chip design community to embrace the cloud; and optimally leverage from it.

 

Now I would not like to open the Pandora’s Box and vent on the numerous challenges that IC designers face…it will provide enough content for a separate article! But generally speaking,  amongst the various challenges an IC design engineer faces, a vital one is Design Methodology management and that includes two vital sub issues, (a)  Accelerating Turn Around Time and (b) Verification challenges. Can the cloud address these?

 

Let’s look into the first one i.e. Turn-around Time. Needless to say, this is one commodity which as a customer requirement is shrinking, especially for chips in the consumer applications. And the key entity here is the efficiency and effectiveness of the design flow. A point to clarify -  by design flow here, I am referring to the common design flow framework or the chip design methodology and not about the computing power and time (which are nevertheless key and can be addressed by cloud). This includes issues like design framework, EDA tools integration and biz model, efficient and safe design data transfer across databases etc.

 

The biggest challenge I see in a Design Framework for cloud is the feasibility of a standardized generic flow or a common design methodology/platform. Do customers have the motivation to re-architect their existing methodologies to take full advantage of cloud? Without such a flow, cloud will provide a computing ground for multiple jobs using multiple EDA tools i.e. we would be leveraging only on the computing power and storage from the cloud.

 

What will provide value-addition to this power-storage combo is a seamless design flow platform for the chip designer. This may be a standardized flow or a generic one with flexibility to include changes based on user needs – a replica of what a designer does in a “cloud less’ environment.

 

The second challenge here is the usage of multiple point tools (both from various EDA vendors as well as the in-house tools and scripts – something which experienced designers use quite a lot). Almost no one uses a single vendor flow nowadays. Let’s say we address this by multiple clouds, each cloud serving an EDA tool from a particular EDA vendor. This will involve movement of data across clouds in order to run multiple tools on the design database at various stages –giving rise to concerns on the huge data size and its security.

 

A likely solution to all this may be a unified GUI framework encompassing a generic seamless design flow with multiple point tools along with an easy to integrate various tweaks in the flow. This requires collaboration across EDA vendors and therein lies the third challenge – how does one get the EDA vendors to co-operate under a unified and a commercially viable biz model. Add to it, the point that users are not likely to pay for the complete menu of a unified design flow with multiple tools from multiple vendors (or for that matter even single EDA vendors). They will pay only for the tools as and when they use them. Collaboration, Licensing and viable biz models is key.

 

The next issue is Verification. With verification taking almost 60-70% of the total design time and its growing importance, this has become a major contributor to sleepless nights for the IC designers. - Verification concerns include handling of humungous data and that too with a highly iterative flow, requirement of high computing power as a sustainable expense, on a need be basis, scalable (different verification tasks require different hardware) and a limitless on demand compute time, high concurrent access and synchronization of databases, data integrity (need version control) and lastly efficient handling of batch jobs as well as interactive jobs.

 

Apart from Design Methodology management, a couple of other stormy points in the chip design cloud path are cloud ownership and secondly the security, data integrity and back-up.

I see cloud ownership as a vital component of chip design security in the cloud. After all, if I were to place my company’s most precious assets –i.e. my chip design database – on a cloud, I will definitely like to know as to who owns the cloud. And this is on top of my regular apprehensions about my data security, back up and related aspects.

 

Let me clarify – I am not talking here about the infra-structure provider e.g. Amazon and the likes. Rather it is the cloud framework/database owner. The framework here includes components of the existing physical eco-system integrated together – design database, EDA tools, user interface etc. – without which cloud computing will just service individual IC design tasks i.e. storage and processing power requirements; something which on its own is not exactly fully leveraging this powerful biz paradigm shift aka cloud computing.

 

So the question is - who will own the chip design cloud? Will it be the foundries (also cited as “natural design aggregators”), the EDA vendors, the fabless design companies or yet another entity? The reply gleaned from most of the stormy discussions elsewhere in the nimbus zone gravitates towards foundry.

 

In summary, cloud computing in chip design will be a big paradigm shift and is poised to bring about tremendous benefits to the design eco-system. However for the design community to actively adopt it, the relevant stake-holders need to look into it in a holistic way and much beyond the scalable and economic computing power and data storage combo.  And this may very well redefine the existing chip design methodology.

posted in Semiconductor, Business, Ecosystem, Cloud, chio design | 0 Comments

2nd March 2012

Elpida files for bankruptcy

The DRAM industry is not for the faint hearted. Add to the inherent “dynamic” nature of this biz, the waning of PC biz and onslaught of mobile tsunami and things definitely start gettimg pricklier.

Earlier this week, the Japanese DRAM maker, Elpida filed for bankruptcy. According to Q4 ’11 figures, Elpida had 12% of the market share, slightly trailing behind Micron (12.1%) and the top 2 players – Hynix (23.3%) and Samsung (44.3%).

Consolidation was waiting to happen in the DRAM space and now prices should hopefully stabilize. One company that does stand to gain here is Micron, the only non-Asian player in this market. It saw its shares rise on this news. A decade back, Micron walked away from a transaction under which it would have acquired the memory operations of South Korea’s Hynix Semiconductor. Now it has another opportunity where it can buy capacity cheaply (Elpida’s Hiroshima plant).

posted in Semiconductor, Business, DRAM, Elpida, Micron | 0 Comments

2nd March 2012

AMD acquires SeaMicro

AMD starts selling Intel based servers – it does make an intriguing catch phrase, correct?

AMD’s latest acquisition of SeaMicro has caused some ripples. SeaMicro is a US based exclusive start-up claiming high power and space reductions (both key factors in the server market). And it currently sells exclusively Intel based servers. Its technology includes a custom CPU (Atom or Xeon) + DRAM + Freedom Fabric ASIC.

AMD has seen its market share in the server market fall from 15% in 2007 to 6.5% in 2011. Add to it the fact that almost 22% of the company’s market share depends upon server sales. So, this acquisition will strengthen AMD’s stake in this sector.

Outlook here may well include – AMD phasing out Intel’s design/chips and replacing with its own (the thread performance of its CPUs score over Intel’s) or perhaps ARM (following its partners (IBM, Dell, HP) and…. at the mention of partners, with AMD selling chips to its existing partners and also selling servers which count these partners as competition, this acquisition can pose a channel conflict

posted in ASICs, Semiconductor, Business, Mergers & Acquistions, Intel, AMD, Server | 0 Comments

26th January 2012

Semiconductor Ecosystem

Recently a friend shared an interesting article, “Restoring American competitiveness” by Gary Pisano and Willy Shih & printed in HBR. While the article focuses on US, it does provide a deep insight and several pointers to the local Singapore context too.

Some of the points I especially liked were the description and importance of “industrial commons “(collective capabilities)” and its role in innovation and development of the ecosystem.

It is increasingly difficult for a company to be competitive in today’s dynamic and cut-throat markets. Being competitive in today’s market requires support of an “ecosystem” of all entities involved in the supply chain like suppliers, equipment makers, customers etc.

Now can an ecosystem be defined as a mere collection or presence of all relevant entities in the same geographical space? We do have several geographies with these entities together. But what is missing – and what turns this conglomeration to an ecosystem is a proactive and broad Collaboration across the entities. And this sort of collaboration is possible only when the users have a stake in the outcome.

And this leads me to ponder – whether Singapore has the ecosystem for the semiconductor industry. And if not, then what’s missing and how do we move towards it? Suggestions??

posted in Semiconductor, Business, Ecosystem | 0 Comments

25th January 2012

Capex disparity…. and the fortifications of the leaders

Add the 2012 planned capex spending of the world’s top two IDMs and you get an almost half of the total ’12 planned semiconductor capital expenditures. Add to it the world’s top pure play foundry’s planned capex and you end up with nearly thrice the amount the group spent in 2009.
This month saw a slew of capex announcements – Intel’s $12.1 to 12.9 billion, Samsung’s 1$2.2 billion and TSMC’s $6 billion; the first two an increase and the last a decrease (18%) from their 2011 capex numbers.

TSMC had already reported their plan to slash their 2012 capex in September last year. The major chunk of their capex this year will be spent on ramping up their 28nm process and their Gigafabs. Incidentally, 28nm accounted for 2% of TSMC’s 2011 revenues while 40nm and 65nm accounted for 27% and 30% each. And remember, they had an oversupply on 65nm capacity while seeing a demand exceeding supply on 28nm. TSMC’s 2012 outlook – a challenging year.

Intel and Samsung have a lot at stake in the mobile internet devices (MID) market. Intel is betting high on its ultrabooks while Samsung owes much of its lucrative foundry biz to Apple. In addition, it is aggressively ramping up for its in-house application processor to ride on the surging MIDs wave.

These two have an advantage of their in-house designs to test and ramp up on leading edge processes while the pure play foundries like TSMC rely much on their customers’ designs for this.

One thing that is getting increasingly visible – the chasm between the leaders and the ROP (Rest of Pack) is steadily increasing. While this beckons consolidation, it also serves as an innovation catalyst for the smaller but niche companies and strategies emerging in and filling this gap.

posted in Semiconductor, Business, Foundry, MIDs, Intel | 0 Comments

14th January 2012

A 2011 snapshot of the Semiconductor Business

This is the time of the year when the digital cooler is abuzz with the gazing into the crystal ball.
Here I take a look at what all that happened in the semiconductor space in the year just gone past….
for is it not the past that also paves the way the New Year pans out?

A snippet into the year that’s just gone and an usher for the next one…. with an Asia-Pacific region focus
A 2011 snapshot of the Semiconductor Business

posted in Semiconductor, Business, Samsung, Qualcomm, MediaTek, Spreadtrum, MStar, Intel | 0 Comments

25th October 2011

Could TSMC be your next chip design cloud owner?

In a 2009 technical report, ”The Clouds: A Berkeley view of cloud computing”, the authors cite “Cloud Computing is likely to have the same impact on software that foundries have had on the hardware industry”. The underlying logic being the high cost of semiconductor fabrication line leading to the rise of semiconductor fabs and these in turn “enabling” fabless semiconductor design companies whose value is in innovative chip design.

A week back, I moderated a panel discussion on cloud computing in the IC design world, especially on accelerating time to market. While issues on security – a challenge which is stacked right on top of the “barriers to entry”, were defended and discussed quite animatedly, Surprisingly, it was the “cloud ownership” aspect which evoked only some tepid responses.

Now from where I stand, I see cloud ownership as a vital component of chip design security in the cloud. After all, if I were to place my company’s most precious assets –i.e. my chip design database – on a cloud, I will definitely like to know as to who owns the cloud. And this is on top of my regular apprehensions about my data security, back up and related aspects.

Let me clarify - I am not talking here about the infra structure provider e.g. Amazon and the likes. Rather it is the cloud framework/database owner. The framework here includes components of the existing physical eco-system integrated together – design database, EDA tools, user interface etc. – without which cloud computing will just service individual IC design tasks i.e. storage and processing power requirements; something which on its own is not exactly fully leveraging this powerful biz paradigm shift aka cloud computing.

So again – who will own the chip design cloud? Will it be the foundries (also cited as “natural design aggregators”), the EDA vendors, the fabless design companies or yet another entity? The reply gleaned from most of the stormy discussions elsewhere in the nimbus zone gravitates towards foundry.

Which brings me back to the where I started this post – Riding on cloud computing, foundries may turn out to influence the hardware industry in more ways than one. And who else is better equipped to lead the way here than TSMC??

posted in Semiconductor, EDA, Business, Foundry, Fabless | 0 Comments

16th August 2011

So what’s the deal with the Google –Motorola Mobility deal, eh?

The cyberspace is abuzz with news about Google acquiring Motorola Mobility for a whopping $12.5 billion. Speculations on Google’s motive behind the deal are mainly skewed towards 2 issues – access to patents and the other whether Google has plans to set up another end-to-end mobile empire akin to Apple. Add to that the buzzing concern of a high potential for conflict - mainly whether there still will be a “level playing field” amongst different Android handset vendors.

My two cents….

1. Access to patents: Motorola deal gives Google access to more than 17000 patents. This helps Google lend a legal hand to the embroiled Android handset vendors like HTC and Samsung as well as prepare itself against potential infringement law suits.

Flip side: If that was the main point, would Google not have been better off with just buying the patents like it did from IBM?

2. Potential conflict of interest – open OS partner or a handset competitor?? Now that can indeed be a worrying factor amongst the Android handset vendors - in spite of the prompt support statements from Samsung, HTC etc. Will these companies who had flocked towards Android to compete against Apple now gravitate towards Microsoft’s Windows Mobile? Google has stated that the handset biz will be kept as a separate independent biz and Android platform as an open one as before but the company will have a tough time treading this slippery slope in order to retain the Android handset vendors’ support.

Having said that, we have seen biz areas where the line between partner and competitor has blurred. Pure play foundries, IP vendors and IDMs is one such example. Market conditions have led to consolidation, fab lite etc. IDMs get the core process wafers done from foundries and keep some special process add-ons in-house to retain their specific niche. IP vendors work along with foundries in spite of foundries touting their own IP portfolio as well as specific design services.
Individually it has got very difficult to compete, with combining resources, there always lurk the spectre of “loss of level playing field”.

3. An Apple like end-to-end empire: Lucrative but an extremely difficult path ahead for the search engine giant in the hardware world… a tough act to follow!

But apart from these, the news throws up another nugget too:

The central point of computing is moving away from the desk towards mobile - and search engines do follow the computing devices. A tight integration between hardware and OS will make it easier to get the desired utilities and apps to the consumer – providing the coveted “unique user experience’.

The deal goes beyond handsets. Motorola Mobility is also into set top boxes – just to name another one. This will bring Google back into the home automation market. Gigaom’s Stacey Higginbotham & Katie Fehrenbacher has written a very good article on this; do read it. Getting your ads, location optimized and perhaps with dynamic relevance does require a tighter integration between the hardware and software.

And it is for this reason alone, my opinion is that it will very much be in Google’s interest to keep Motorola Mobility humming away as a separate unit within Google – especially as far as the level playing field of Android handset entities are concerned and leverage this hardware vendor acquisition to bolster its search ads revenues by making it’s ads more pervasive and relevant.
The patents are the special icing on the cake!!

posted in Semiconductor, Business, Industry Events, Mergers & Acquistions, MIDs, Hardware | 0 Comments

26th July 2011

MStar & Mediatek vying for Nokia’s 2G biz??

What happens when two local companies fight for the same pie? And when that pie has a component from a “once market leader, now floundering handset maker”? And when one of the pie contestants is also gnawing the market share of this “once market leader, now floundering handset maker”?

Well, speculations abound!

MStar and Mediatek,the two Taiwanese chip makers for mobile handsets are vying for Nokia’s 2G phones’ biz - a volume estimated to be around 285 million in 2013.

Mediatek made its prolific rise in handset chip biz by supplying chips to the shanzai/white box handset makers in China. By doing so, it eroded Nokia’s market share in that segment (of course, the other end of the spectrum was eroded by Apple, Samsung and the likes!)

MStar steered clear from this segment and has supplied customized chips to Samsung and LG for higher end mobile phones. Perhaps, these will steer Nokia’s biz towards them…

Lately Mediatek has been shedding it’s “shanzai market” tag and moving up the value chain – Spreadtrum may have a lot to do behind this move!

Interesting times ahead for these sparring compatriots!

posted in Semiconductor, Business, Communciation, Fabless | 0 Comments

22nd July 2011

Spreadtrum acquires Telegent - Deja-vu??

Spreadtrum Communications, the fabless developer of baseband and RF chips recently announced its acquisition of Telegent Systems, a developer of software and silicon for the reception of live broadcast television signals.

While trolling the net, I saw this article that gives a quirky feeling of déjà vu. The article’s contents basically go on these lines….

In 2007, the US Wi-Fi provider and GPS manufacturer, SiRF bought Centrality, a company with navigation & multimedia experience. Later, SiRF itself got acquired by CSR. In hindsight, industry analysts viewed the Centrality purchase as a bad move.

Now the money/invested parties part …Centrality’s major investors included Walden International and it had a NEA (New Enterprises Association) principle on its BoD. An NEA principle was also on the SiRF’s board. Baseline appeared to be - sell the company to a public company and for enough cash that would return the VC capital and perhaps a large profit at the same time for the investors.

Move on to today…

Spreadtrum buys Telegent. Telegent shot into fame (and profits) with its analog broadcast TV. Since then, it moved to mixed signal and then to digital – a realm with intense price competition and very low margins.

Telegent’s investors include New Enterprise Associates and Walden International. Telegent’s CFO was once SiRF’s CFO. Spreadtrum has an NEA principle on Board….. you get the drift?

Will Spreadtrum do a SiRF???

posted in Semiconductor, Business, Communciation, Fabless, Mergers & Acquistions | 0 Comments

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