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Intel Aims for the Upper, Upper Decks

Intel Aims for the Upper, Upper Decks
by Ed McKernan on 01-20-2012 at 3:07 pm
Categories: Foundries, Intel Foundry

Since the introduction of Apple’s iPhone and then the follow on iPAD, it has been Wall Streets frame of reference that Intel would be playing defense as the PC market slid into oblivion and therefore a Terminal Value should be placed on the company. Intel’s Q4 2011 earnings conference call provided a nice jolt to the analysts as Paul Otellini signaled a massive Home Run to the Upper, Upper Decks is coming. The result of this is that a whole slew of Fabless Companies are about to get their functionality integrated into Intel’s smartphone, tablet and ultrabook platforms courtesy of the low power 22nm and 14nm trigate processes.

The old model was that Fabless was safe because it required little upfront capex outlay as the semiconductor market rotated in and out of boom and bust cycles. Therefore the higher P/E ratios accrued to Qualcomm, Broadcom, Altera, Marvell, Xilinx while Intel sat at a lowly 10 P/E. In addition, the Sovereign Debt Crises that had its beginnings over 10 years ago struck fear into ordinary investors who fled equity’s for the absolute safety of low yielding government bonds resulting in further P/E compression. However as Governments begin to print their way out of their massive liabilities, we may see a new safe haven for investors: the American export-oriented companies that sit on massive cash hordes and will be able to borrow at lower rates than the broke Sovereigns or their would be competitors.

Intel knows this and is leveraging its strong financial position into an even bigger investment in 2012 of 14nm capacity and R&D which can only mean that they are on a path to implement a mobile and datacenter roadmap that completely cannibalizes companies like Broadcom and Marvell in networking and the ARM camp in mobiles. The only possible holdout will be Qualcomm with their Communications IP.

On top of last years massive $10.8B Capex spending, Intel plans to spend $12.5B to build and outfit two 14nm fabs and thereby have in place by late 2013 twice the fab footprint they had in 2011 with 32nm. In addition, R&D spending is increasing 21% to $10.3B. That says there are a lot of tapeouts coming at 22nm and 14nm this year alone.

The revenue that Intel has guided to this year is only supposed to increase by “high single digits” so it means that they will only tag on an extra $5B to this years $54B. However, none of this takes into account the likely addition of Apple by end of the year and the fact that they are being very conservative on the uplift of ultrabooks vs today’s notebooks. A high ultrabook cannibalization or incremental growth scenario would mean much higher ASPs at the same volume as Intel charges a nice premium for low power.

Going into 2013, Intel plans to launch Haswell, which is a new microarchitecture that I would strongly speculate will take the TDP down from 17W for the ULV to under 10W. In the 1990s Intel’s business model paid more for higher MHz. Now the model pays for lower and lower TDP and higher integration. With a lower TDP, Intel will open up the next big revenue driver in tablets and ultrabooks, which is Intel 3G/4G/LTE baseband that will be common across all mobiles. Who wants to be limited by WiFi when Cellular is everywhere? Intel will argue that it’s communications solution in the latest trigate will overcome the power problems seen in the silicon coming out of the Fabless players and therefore ruin battery life and make enclosures more difficult to design.

Against this backdrop, it is important to remember that the other components in the tablet and ultrabook continue to drop in price (e.g. Screens, HDDs and Flash), which enables Intel to increase its relative BOM content in a rising unit volume market. Therefore tracking Intel’s revenue growth is more than linear with PC or Tablet unit growth.

If Intel succeeds with its plans, it will put tremendous pressure on TSMC and their ability to keep up as they rely on Qualcomm, nVidia, Altera and Broadcom to fund leading edge production. It also raises a question about Samsung’s plans to utilize Intel based solutions vs its internal ARM based chips. Samsung has been a long-standing PC player and will need to use Intel x86 in corporate tablets with Win 8. The smartphone and consumer tablet business is not just open for question, but open to Intel commoditization.

To accelerate the market move to Intel silicon in Smartphones and Tablets, Intel has just announced agreements with Motorola and Lenovo, the former home of Rory Read (CEO of AMD). Lenovo has been gaining share in the PC market at the expense of Dell and HP. With this deal, Intel is using the world’s lowest cost supplier to threaten the existing Android tablet and smartphone leaders HTC and Samsung. It will put extreme pressure on ARM processor suppliers later this year. The Motorola deal means that Intel will get preferential treatment in the tuning of the latest Google Android O/S for x86. ARM now will move to the back of the O/S bus.

The real story at the end of the day is that Moore’s Law is an even more destructive force than it was two years ago as the cost for the Fabless guys to play in Intel’s court has been raised dramatically. The Barbed Wire Fences Have Just Been Moved Out and Intel’s Ranch has grown.

FULL DISCLOSURE: I am Long AAPL, INTC, ALTR and QCOM

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The Qualcomm PUT and The FABulous Year Ahead

The Qualcomm PUT and The FABulous Year Ahead
by Ed McKernan on 01-19-2012 at 5:14 pm
Categories: Foundries, Intel Foundry, TSMC

Humor can arise in surprising ways and yet still be disguised to many. As I was researching Qualcomm the other day, I came upon the transcript of their last quarterly earnings and I had to laugh. In the midst of last summer’s European crises, when the Club Med (Greece, Italy, Spain and Portugal) Sovereign Debt was trying to be rolled over with few takers and stocks swooned across the globe, there was Qualcomm injecting a little humor into the markets. You see, in the midst of everyone selling, did a very bullish thing: they sold over $500M of PUTS and collected $75M doing so. At the last earnings call, none of the analysts inquired. Why does a company with $21B in the bank sell PUTS to earn $75M? The answer, I believe has to do with Qualcomm looking to raise its profile even further as they separate themselves from the rest of the mobile ARM camp. However, 2012 will require an even bigger bet the company move.

Throughout the 1990s, Alan Greenspan, disciple of Ayn Rand, and perhaps the most knowledgeable person on the planet in terms of the gives and takes of the economy liked to befuddle congress with presentations that were incomprehensible with the result being that he had great degrees of freedom in pursuing a monetary policy that he believed generated optimum economic growth with low inflation and a stock market that for the most part headed north. An economy, though is a complex thing and even though he thought he could calibrate the health and dynamism by monitoring things like weekly cardboard box production, outside forces could take the stock market down (e.g. the Asian Crises in 1997 and LTCM in 1998). When a crises occurred he would swing into action by implementing what became known as “The Greenspan PUT”. The Fed would immediately lower interest rates and stocks would head higher to the cheers of the investment class. The PUT has limitations, as is seen in our current crises, when debt loads get too large.

Qualcomm’s PUT, in the midst of the European crises was a signal to Wall St. that they believe very good times lie ahead regardless of whether Italy, Greece, France or the whole EU goes in the tank. Although market indications lately show that Europeans will forsake everything to get their hands on an Apple iPAD and iPhone. Perhaps even Italian three hour lunches. Not to worry the money printing has already begun. So, Qualcomm’s selling of PUTS in Q3 was a bullish signal that at the time of expiration in 2H 2012, the stock will be higher than the strike price (I am guessing between $45 and $50 as Qualcomm’s stock flirted with a low of $46). Qualcomm said the breakeven price of the PUT option is roughly $43 a share. Below that they have to write a check to buy the stock back.

Qualcomm’s $21B stash of cash is greater than Intel’s and will soon be three times that of nVidia, Broadcom and Marvell combined who make up the ARM camp that not only are Qualcomm’s chief competitors but licensees. Qualcomm stands as a tall Redwood in a forest of seedlings as it is more than an order of magnitude larger in sales than any of the current ARM campers. But there are major business decisions coming down the pike.

Qualcomm, along with Intel and Apple have the most direct impact on the shaping of the smartphone, tablet, ultrabook mobile Tsunami marketplace and yet each impact it differently. Intel is driving ultrabook to be the form factor that separates them from nVidia and AMD giving them a de-facto Monopoly position in the PC space while also pursuing Apple for the iPhone and iPAD processor business. Apple, we know owns the iTunes Walled Garden Ecosystem that gives them the upper hand in selecting from a cornucopia of suppliers for its next products. You can say that Qualcomm is the winner no matter what communications solution is chosen – whether it is its own chipset or a royalty bearing solution from Broadcom, Intel, Marvell and others. However the big money is in supplying the chips and that can be a problem or opportunity.

As mentioned in previous blogs, the economics of Mobile Tsunami are different than the PC market. Apple and Samsung continue to go Vertical in their supply chain to remove excessive margins. In return for a capital investment and guaranteed demand, Apple gets vendors to drop ASPs and margins. Intel is approaching Apple with a production model that can retain its standard 50-60% Gross Margins but ASPs lower than Samsung due to their 2-3 year process lead. Qualcomm on the other hand sells chips that include the TSMC margin on top of their own 60%+ gross margin.

Bottom line: Does Qualcomm use its $21B cash to build a fab to eliminate TSMC margins and build next generation communications chips that aren’t available elsewhere? Do they approach Intel to Fab next generation standalone chips while offering Intel first rights on “volume integrated communications.” I don’t see Qualcomm moving to a complete IP model. However, the maturation of the very high volume mobile market combined with the economics suggest that the winners will either own Fabs or be IP Houses and a shakeout will take place among the Fabless. There is room for one profit margin, not two – unless you build at Intel. 2012 could be a very decisive year for Qualcomm.

FULL DISCLOSURE: I am Long AAPL, INTC, ALTR, QCOM.

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What is a Hierarchical SPICE Circuit Simulator?

What is a Hierarchical SPICE Circuit Simulator?
by Daniel Payne on 01-19-2012 at 2:56 pm
Categories: EDA, Siemens EDA

Hierarchy is used in IC designs at many abstraction levels to help describe a design in a compact format:

  • Mask Data
  • IC Layout
  • Schematic Netlists
  • Gate level netlists
  • RTL netlists

But the question and focus for this blog is, “What is a hierarchical SPICE Circuit Simulator?”
Continue reading “What is a Hierarchical SPICE Circuit Simulator?”

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NoC for faster SoC integration

NoC for faster SoC integration
by Eric Esteve on 01-19-2012 at 5:32 am
Categories: Arteris, IP

The need for Network-on-Chip (NoC) has appeared at the time where chip makers realized that they could really integrate a complete system on a single die to build a System-on-Chip (SoC). I was in charge of the development of a large IC, integrating different type of functions (Analog and Digital) to support advanced TV application. It was a long development, far to be easy, but the chip was not a SoC (even if at that time -1995- it was using the largest array available in TI ASIC technology). There was no integrated CPU, no SRAM and no High Speed Interconnect I/O. The SoC definition we agree in the industry is that the chip at least integrates a CPU (or GPU) core, then some amount of internal SRAM (or DRAM) and various peripheral functions specific to the Application. Considering this definition, “real” SoC designs have appeared in the early 2000. There are certainly exceptions to this rule, or designs integrating an embedded CPU earlier, but this were reserved to very high production volume projects.

When the chip makers have realized that Moore’ law was allowing complex SoC development, they understood that such development was only possible if they could assemble existing IP blocks (externally sourced or internally designed). Integrating various IP, each of these being a complete functional block, in a chip lead to the next problem to solve: how to efficiently interconnect these functions together and with the CPU (GPU)? Then came the need for something more efficient than just a crossbar switch (see previous post), a kind of “intelligent” interconnect system, say a Network, and because it’s to be internal, a Network on Chip: the NoC.

The above picture illustrate the move from the design of a Video Engine (in the 1990…), requiring a Village type of traffic when compared with a SoC design of the 2000 (OMAP4 from TI) requiring a City Traffic infrastructure. If we try to be more specific (and scientific!) we can say that a NoC is similar to a modern telecommunications network, using digital bit-packet switching over multiplexed links. Although packet-switching is sometimes claimed as necessity for a NoC, there are several NoC proposals utilizing circuit-switching techniques. This definition based on routers is usually interpreted so that a single shared bus, a single crossbar switch or a point-to-point network are not NoCs but practically all other topologies are.

Arteris’ FlexNoC interconnect IP product line generates a true NoC IP with distributed packetized transport and high-level SoC communication services, as opposed to a hybrid bus with centralized cross bars, as we have explained in this post.

Network-on-Chip (NoC) is an emerging paradigm for communications within large VLSI systems implemented on a single silicon chip. Sgroi et al. call “the layered-stack approach to the design of the on-chip intercore communications the Network-on-Chip (NOC) methodology.” In a NoC system, modules such as processor cores, memories and specialized IP blocks exchange data using a network as a “public transportation” sub-system for the information traffic. A NoC is constructed from multiple point-to-point data links interconnected by switches (a.k.a. routers), such that messages can be relayed from any source module to any destination module over several links, by making routing decisions at the switches. A NoC is similar to a modern telecommunications network, using digital bit-packet switching over multiplexed links. Although packet-switching is sometimes claimed as necessity for a NoC, there are several NoC proposals utilizing circuit-switching techniques. This definition based on routers is usually interpreted so that a single shared bus, a single crossbar switch or a point-to-point network are not NoCs but practically all other topologies are. This is somewhat confusing since all above mentioned are networks (they enable communication between two or more devices) but they are not considered as network-on-chips. Note that some articles erroneously use NoC as a synonym for mesh topology although NoC paradigm does not dictate the topology. Likewise, the regularity of topology is sometimes considered as a requirement which is, obviously, not the case in research concentrating on “application-specific NoC topology synthesis”. Let’s add that the first dedicated research symposium on Networks on Chip was held at Princeton University, in May 2007… pretty recent, isn’t it?

To learn a lot more about NoC and Arteris products, just go here.

By Eric Estevefrom IPNEST

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Apple 4S nearly catches up to Android, perhaps

Apple 4S nearly catches up to Android, perhaps
by Paul McLellan on 01-19-2012 at 4:00 am
Categories: General

Apple’s iPhone did well in Q4 according to Neilsen who polled recent buyers of smartphones. Of people who had purchased a smartphone in the previous 3 months (roughly Q4) 44.5% chose an iPhone (up from 25.1% in October, roughly Q3). But Android retained the lead with a 46.9% share, down from 61.6% in October. How many phones are we talking about? Apple is expected to announce in its earnings call that it sold over 30M iPhones last quarter. Happy Holidays lots of people.

To be honest, I think these numbers are a lot less significant than they sound. The latest iPhone, the 4S, went on sale on October 14th. Everyone knew it was coming and so most people who wanted a new iPhone waited until then. So Q3 numbers for Apple were temporarily depressed and Q4 numbers were temporarily boosted. If we guess that half the difference is this one-off kick (and I have no idea if it is) then iPhone is really 35% and Android is really perhaps 60% leaving everyone else with crumbs (Blackberry, Nokia+WP7).

As long as Apple continues to post numbers in this sort of range, and doesn’t retreat to, say, 20% market share then it wins. It has enough of a base that people will want to write apps for it (you make more money on an iPhone app than an Android app) and Apple will take almost all the profit out of the smart phone hardware market (or even the whole cell-phone hardware market since the non-smart-phones (stupid-phones?) don’t make much profit especially at the low-end).

Android hardware manufacturers like HTC simply do not have the high margins that Apple has, they have the margins of a typical PC manufacturer of a few percent. It will be interesting to see if Motorola, soon to be part of Google, can get any sort of price premium or even if Google wants to go that route, as opposed to flooding the world with as many Android phones as it can. It is not clear to me that buying Motorola, pretty much giving away the phones, and making it back on search (versus trying to build it into a profitable business in its own right) would be a good idea. Yes, Google makes most of its money on search, but that’s no reason not to try to make money elsewhere.

There was some noise at CES about handsets, mostly around the (I believe very serious) entry of Intel into the cell-phone SoC market rather than the handsets themselves. But CES is not the big show for cell-phones, that would be the Mobile World Congress at the end of February in Barcelona (used to be called GSM Congress back when it used to be in Cannes). So it will be interesting to see if there are significant announcements there.

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Low-power IC design in Switzerland

Low-power IC design in Switzerland
by Daniel Payne on 01-18-2012 at 7:17 pm
Categories: EDA, Tanner EDA

My wife and I have traveled to Switzerland on vacation and marveled at the natural beauty of the mountains, efficient train system, tasty chocolate, and wonderful foods. I only wished that our American dollar bought more in Swiss currency than it did. Recently I discovered a high-tech IC design company called Microdul that designs mixed-signal chips with ultra low-power specs in product areas like:

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NFC, Why is this a big deal?

NFC, Why is this a big deal?
by Daniel Nenni on 01-18-2012 at 7:00 am
Categories: General


NFCis all over the news. Payments from your phone, yeah! I was wondering why this is a big deal, and why it has taken so long to gain momentum. I was issued a RFID enabled employee badge (JavaCard) 10 years ago while working at Sun. RFID is now so prevalent that Walmart attaches RFID tags to clothes. I spent an hour wading around the internet to gain a better understanding and thought I’d share a quick summary.
Continue reading “NFC, Why is this a big deal?”

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Addressing the Challenges of Tomorrow’s SoC Design

Addressing the Challenges of Tomorrow’s SoC Design
by Paul McLellan on 01-17-2012 at 5:28 pm
Categories: EDA

For the next few days Atrenta is running a series of 30 minute live webinars to discuss the new solutions and approaches that are required to improve the way SoC designs are created and modified.

The webinars are at the following times:

  • Jan 17th, 7-7.30am PST (sorry you missed that one)
  • January 18th 7.30-8pm PST (and January 19th in Asia)

In this 30 minute webinar they will explore innovative solutions to these challenges and discuss how solutions based on using Atrenta’s SpyGlass® and GenSys™ product families work on a real design example. Atrenta will demonstrate how to boost productivity and design efficiency by taking an existing tablet design and transforming it within minutes to create a next-generation tablet that features front and rear cameras as well as an HDMI interface.

Also of interest are two recorded webinars:

  • Fast track to IP quality
  • Fast track to confidential RTL handoff

To sign up for any of these webinars go here.

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Chip-Package-System workshops

Chip-Package-System workshops
by Paul McLellan on 01-17-2012 at 4:30 pm
Categories: Ansys, Inc., EDA

Chips, packages and circuit boards (systems, hence CPS) used to be three separate domains with their own tools that barely interacted at all. If you were lucky, reassigning a pin on a package wouldn’t have to be done manually in all 3 places. But now, from a signal integrity, noise, power point of view these three domains must be analyzed as a single system where everything interacts with everything else.

At DesignCon in February, Apache is running two workshops on these issues. Both are on Wednesday February 1st.

The first workshop, on CPS for Cost-down and Reliabilityis from 10.15 to 12.15. Apache along with featured speakers Dr Mondira Pant of Intel and Dr Amit Argawal of Cisco will share their insights and expertise in the area of chip-package-system (CPS) convergence and will discuss various aspects of analysis methodologies in terms of modeling, extraction and simulation. Topics will include comprehensive global power delivery optimization at the chip, package and board levels, system-level signal integrity analysis, along with case studies and real design examples.

The second workshop, on CPS for 3D-IC and Power-Thermal-Mechanical-Electrical Applications is from 2-4pm. 3D stacked die and 2.5D Silicon Interposer chip designs with through-silicon vias (TSVs) have emerged as upcoming technologies, enabling designers to meet the performance, power, and form factor demands of today’s ICs. However, 3D-IC designers face unique challenges such as thermal-induced EM and reliability issues, along with place and route congestion due to TSV insertion. Apache and featured speakers Dr Tim Hollis of Micron, Ivor Barber from LSI and Dr Simon Burke of Xilinx will examine the various modeling and simulation challenges in 3D-IC design. Methodologies for the analysis of power delivery network, chip-to-chip communication, and thermal integrity will be covered using real case studies on designs.

More details here including how to get 20% off your DesignCon conference pass or get a free exhibit pass (Apache is at booth 214).

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What products shown at CES will drive electronics and semiconductor growth in 2012?

What products shown at CES will drive electronics and semiconductor growth in 2012?
by Bill Jewell on 01-17-2012 at 11:20 am
Categories: Events, Semiconductor Intelligence

The International Consumer Electronics Show (CES) last week in Las Vegas, Nevada was the largest in history, with over 3,100 exhibitors and over 153,000 attendees – over 20% international. Hopefully this was a good sign of a solid recovery in the electronics and semiconductor industries. The major Japanese and Korean consumer electronics companies had huge display areas: Sony, Samsung, Toshiba, LG, Panasonic, and Sharp. Emerging Chinese company Haier also had a large display. A few semiconductor companies put up large booths including Intel, Qualcomm, Broadcom, Marvell and Silicon Image. Several other semiconductor companies had smaller booths or meeting rooms.

At the back of the South Hall were several tiny booths which reminded me of the Texas State Fair – not the food booths where they fry anything that doesn’t move, but the booths with all sorts of gizmos designed to fill needs you did not know you had. One CES booth had electronic gadgets to sooth your various aches and pains. Another booth had models in bikinis. (Maybe they thought it was a boat show?)

The products on the display floors included newer versions of current devices: large screen LCD and 3D televisions, smartphones, media tablets, ultrabook PCs, digital cameras, etc. Some advanced products which are year or two away from introduction included glasses-free 3D TVs and TVs with over 4 times the resolution of HDTV. Many interesting products for niche application included a GPS locator for dogs and head mounted video cameras for extreme sports junkies.

The key question is: What devices will drive growth in consumer electronics and semiconductors in 2012?

In the opening keynote, Qualcomm CEO Dr. Paul Jacobs said emerging countries will drive growth in smartphones since mobile is the only way to connect to the internet in many countries. CNET’s session proposed the Next Big Thing in consumer electronics will be the ecosystem – getting various devices to work together simply and effectively.

The Consumer Electronics Association – which puts on the CES– projects three categories will drive growth in 2012 (as measured in U.S.dollars). Home IT and Security growth of 5.6% in 2012 will be driven by media tablets, which were the key driver in 2011. In-vehicle Entertainment is the only category expected to show significant growth acceleration in 2012, 11.9%versus 7.4% in 2011, driven by internet radio and streaming audio. Portable communication growth of 14.3% in 2012 will be primarily from smartphones.Overall consumer electronics growth in 2012 is forecast at 3.7%, less than half of the 7.9% growth in 2011.

DIGITIMES Research of Taiwan projects smartphone unit growth of about 40% in 2012 to over 650 million units, following growth around 60% in 2010 and 2011. Media tablet shipments are forecast to grow 60% in 2012 to over 95 million units.

Over 20,000 new products were introduced at CES, a sign that innovation in the industry is alive and well. Many of these products are new and improved versions of existing products. Others represent new product categories which could drive new niche applications or potentially become major products in the next few years. However for 2012, growth will likely be driven by the same products which have driven growth for the last couple of years.