Despite the strong consolidation in the semiconductor industry, the Design IP market is still growing: from $3 billion in 2015 to $3.4 billion in 2016. That’s why the DAC IP Committee has organized this panel, titled “The IP Paradox: Growing Business Despite Consolidations” (you can see more on the events page: https://dac.com/events).
If you monitor the EDA&IP quarterly results shared by the ESD Alliance like we do, you can’t miss the fact that the Design IP Category has become the largest in 2016, growing by 10% YoY in spite of the semiconductor industry affected by consolidation and exponential SoC development cost. That’s a fact and that’s also a paradox!
It sounds like a paradox for two main reasons.
The first is the consolidation currently in action in the semiconductor industry. The most prominent example is Broadcom Ltd., a company created by the merge of Avago and Broadcom. Broadcom had already acquired PLX Technology and NetLogic before the merge, when Avago had acquired in 2016 LSI Logic, a company already issued from the merged of Agere and LSI Logic. This lead to ask a valid question: What is the real impact of semiconductor consolidation on the IC design starts? We could think, intuitively, that the merge of company A and company B necessarily lead to less design starts from AB than from A and B separately…
The second reason is linked with the exponential cost of the SoC design targeting the most advanced technology nodes, leading to a strong decrease in design starts for these nodes as shown by Synopsys in 2016 (see the chart below). We can argue that the number of design starts is growing on the mature nodes, like 180 nm, the mainstream node for IoT related sensor, and this is true. But how many IP can be integrated in an IC in 180 nm? A cheap MCU core, some memory, a standard cell library and that’s it. But the design starts in advanced nodes integrate many more IP (in the 100’s range), and these IP are much more expansive. Less design starts should lead to lower IP revenue, but this is not the case as the IP license only revenue, without royalty, has grown by 9% in 2016.
So, what are the market forces that are fueling IP business growth? IP license price increases? Number of IP in an SoC? Make vs Buy trends? For anybody who is part of the IP ecosystem, buyer, vendor, design service or foundry, this question is not just theoretical! You need to know the market dynamics affecting your business or your customer’s business. That’s why we have gather together several of the best experts, representative of these various field:
Elias Lozano – Open-Silicon, Inc., San Jose, CA
John Koeter – Synopsys, Inc., Mountain View, CA
Sujoy Chakravarty – SilabTech, Bangalore, India
Chengyu Zhu – Semiconductor Manufacturing International Corp., San Jose, CA
Sanjive Agarwala – Texas Instruments, Inc., Dallas, TX
Open Silicon is a design service company, an IP buyer to realize SoC design for his customer, but also an IP vendor (Interlaken IP controller for example). Synopsys is the #2 Design IP vendor, active in many IP segments with revenues from IP reaching $450 million as calculated by IPnest (Design IP Report 2016). SilabTech is much, much smaller than Synopsys, but a very dynamic IP vendor specialized in SerDes and PHY IP. It will be important to get the point of view from SMIC, the Chinese foundry who has to procure IP to his customer, designed internally or sourced to IP vendors. TI is a very good example of the complexity of the IP business model: TI still develops IP internally, but is also one of the main IP buyer on the market.
When we talk about “IP ecosystem”, you can see that it’s a reality when looking at these panelists. To complete this IP ecosystem, it was important to have a moderator who is literally at the hearth of this ecosystem, Dan Nenni, the founder of Semiwiki. If you read this post, that’s because, in Semiwiki, we publish several IP related articles every week since 2011, if you count that’s make 1,000 or more articles completely dedicated to IP.
Let me just add that I have been honored when the DAC IP Committee has accepted this idea (The IP Paradox) that I have proposed, and that I have organized. I am sure that it will be a dynamic panel, helping the audience to better understand the IP market trends and dynamics!Share this post via: