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LAM Not Yet at Bottom Memory Worsening Down 50%

LAM Not Yet at Bottom Memory Worsening Down 50%
by Robert Maire on 04-24-2023 at 10:00 am
Categories: China, Lithography, Semiconductor Advisors, Semiconductor Services

LAM RESEARCH Vantex external chamber lrg 300x300

-Lam reported in line results on reduced expectations
-Guidance disappoints as memory decline continues
-Memory capex down 50% but still sees “further declines”
-Lam ties future to EUV maybe not good idea after ASML report

Lam comes in above grossly already reduced expectations
and misses on guidance

We always find it amusing when companies greatly reduce expectations and guidance then try to act like it was a “beat” of numbers. Lam came in at revenues of $3.87B and EPS of $6.99 which was down 27% sequentially. Guidance was for $3.1B+-$300M versus street expectations of $3.47B and EPS guidance is for $5.00+_ $0.75 versus $5.63. Lam continues to guide down more than the street is looking for as conditions worsen.

Backorders back to “normal”

As supply chain problems have more or less cleared up as demand has fallen off, Lam has used up most all of its backlog and is now in a more “normal” backlog position.

The company still has $2B of deferred revenue to keep it warm at night from pre-payments on shipments to China or Japanese customers awaiting acceptance , so a buffer still remains, somewhat.

Is Lam still a memory shop if foundry is top revenue segment??

Memory business at Lam dropped to a low that we haven’t seen in a very long time as memory was 32% of overall business with foundry at 46%. Probably the bigger piece of the memory business is service, which also sequentially declined, as new tool shipments to memory customers are likely falling to relative near zero levels.

China tied Korea at 22% of business. Service was a huge 40% of business even with the decline as new tools sales obviously kept dropping.

Expecting “further declines” in memory

Lam made it clear that memory capex spend has not yet hit bottom as they commented that “further declines” in memory spending are expected. Memory capex spending was estimated by the company to be down 50% already as memory makers continue to reduce bit growth and bit output to try to shore up declining pricing.

It seems fairly clear to us that given the trajectory and momentum that memory will not recover before the end of the year and the strength of the recovery when it does eventually happen will be weak and slow.

Memory makers will have a ton of existing capacity to bring back online before they buy a single new piece of equipment or even think about expanding or adding new fabs.

In addition to the idled memory making equipment sitting turned off in fabs there are also technology shrinks that will add to capacity without the need to buy new equipment.

The bottom line is that with all the idled equipment, reduced output, and potential technology changes, memory makers could easily survive a year or two based on current demand trajectory without any incremental spending.

The bigger problem is that perhaps only Samsung will be financially able to spend after another year in the current loss environment.

Whenever the current down cycle is over , it will certainly not be memory that leads the way out.

China seems to be buying any chip equipment not nailed down

One of our other concerns that we continue to see is that China has been on a huge spending spree for non leading edge equipment. Its hard to figure out where all the equipment is going as it seems there aren’t that many fabs in China (that we know of).

It has all the makings of the famous toilet paper shortage as people bought in expectation of a shortage.

China seems to be buying any and all equipment they can as they likely fear that they will be cut off from even non leading edge tools. We saw this in ASML’s report this morning where 45-50% of DUV sales were into China.

This demand from China feels artificial and runs the additional risk of slowing because of increased sanctions or just running out of the stampede/herd mentality. This obviously adds to the risk of a longer/deeper downturn

Lam hitches wagon to EUV future (maybe not such a great idea right now…)

During the call, Lam went to lengths to show how it will benefit from the EUV transition and success. They claimed a 75% share of “EUV patterning” related technology (we assume etch) and also spoke about continued wins in dry resist technology.

While this certainly is good , the news from ASML this morning seemed to call into question how much of EUV sales would slow, be delayed or changed over the next year or two. As we previously pointed out this has a negative effect on tools associated with EUV including those made by Lam. It was probably too late for Lam to change their prepared script after the ASML call….

Is this a “second leg down” in the semiconductor down cycle??

As we have been saying and repeated this morning after ASML, we remain concerned that there is a second leg down in the current down cycle or at the very least we are certainly not at a bottom at which we feel comfortable buying chip equipment stocks at already inflated valuations for a down cycle.

Lam clearly called for further declines in memory and guided to further lower revenues in their business. There was no talk on the call about being at or near a bottom in business. The amount of China business is a double edged sword in that it helps soften the blow of the downturn but creates an additional risk in exposure to a politically unstable market.

The stocks

We have zero motivation to buy Lam or any other equipment stock after the run that they have had. We would expect some sort of rationalization of valuation after earnings season and investors and analysts figure out that we haven’t yet hit bottom and there is further unknown downside.

Macro economic conditions certainly don’t give us any comfort either.
From a Lam specific perspective, memory will likely be the last to recover and very slowly at that.

With today’s set up from both ASML and LRCX we would expect that KLAC will have similar comments and AMAT as well though a month later.
We can’t imagine anyone making positive commentary about the industry trajectory any time soon.

Bullish analysts who called the bottom a bit too soon will likely be out defending their position tomorrow or defending that Lam “beat” their numbers (if you can describe being down 27% sequentially a “beat”)

Bottom line is that “it ain’t over till its over” (Yogi Berra) and its not over yet…..

The light at the end of the tunnel could be an oncoming train….

Also Read:

ASML Wavering- Supports our Concern of Second Leg Down for Semis- False Bottom

Gordon Moore’s legacy will live on through new paths & incarnations

Sino Semicap Sanction Screws Snugged- SVB- Aftermath more important than event

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Synopsys Accelerates First-Pass Silicon Success for Banias Labs’ Networking SoC

Synopsys Accelerates First-Pass Silicon Success for Banias Labs’ Networking SoC
by Kalar Rajendiran on 04-24-2023 at 8:00 am
Categories: AI, EDA, IP, Synopsys

Image to Depict Optical SoC

Banias Labs is a semiconductor company that develops infrastructure solutions for next-generation communications. Its target market is the high-performance computing infrastructure market including hyperscale data center, networking, AI, optical module, and Ethernet switch SoCs for emerging high-performance computing designs. These SoCs require high-speed Ethernet designs and low-latency solutions to provide increased system performance and accelerate time-to-market. The company has developed an optical DSP SoC on 5nm process technology to address the requirements of this market.

An optical DSP SoC is a specialized type of system-on-chip (SoC) designed for use in high-speed optical communication systems. In addition to the DSP, the optical DSP SoC typically includes high-speed interface IP blocks, such as Ethernet PHY IP, PCIe IP, and DDR memory controllers. These types of SoCs enable high-speed data transfers at low latencies for real-time signal processing. They are also designed to minimize power consumption, making them ideal for applications that require efficient operation with reduced thermal issues. With the advantages come challenges too. The specialized requirements of optical communication systems make designing an optical DSP SoC more challenging than designing a regular SoC.

Implementation Challenges

The challenges revolve around the complexity of the design, the tight power and performance requirements, and the need to meet various industry standards. The integration of multiple IP blocks including the DSP processor, Ethernet PHY IP, and other custom blocks requires careful design and validation. Additional high-speed interfaces such as PCIe and DDR add further to the complexity of the design. The high-speed interfaces and multiple IP blocks in the system can create signal distortion, crosstalk, and electromagnetic interference, which can impact system performance and reliability. Signal and power integrity analysis and optimization must be performed early in the design cycle to ensure that the system can meet its performance and reliability requirements. Finally, meeting time-to-market requirements can be challenging. The high-performance computing infrastructure market is rapidly evolving, and SoC development teams need to deliver their designs quickly to stay ahead of the competition.

Getting to First Pass Silicon Success

Overcoming the above mentioned challenges requires a comprehensive approach. One of the critical components of high-performance, low-latency solutions is the Ethernet PHY IP. The Ethernet PHY IP is responsible for the physical layer interface between the SoC and the Ethernet network. The IP must support high-speed Ethernet interfaces, including 10G, 25G, 40G, 50G, 100G, 200G, 400G, and 800G, and provide low latency and low power consumption. Additionally, the IP must support various standards, including IEEE 802.3 and Ethernet Alliance. Another important component is the EDA design suite. The EDA design suite must provide a comprehensive solution for designing and verifying the SoC, including power optimization, performance analysis, area optimization, and yield analysis. To the extent, the EDA design suite includes advanced features, such as artificial intelligence (AI) and machine learning (ML), the better for enhanced productivity and reduced time-to-market.

Synopsys Accelerates First Pass Silicon Success

Synopsys offers solutions that address the unique challenges of developing SoCs for the high-performance computing infrastructure market. The company provides a comprehensive IP solution that includes a routing feasibility study, packaging substrate guidelines, signal and power integrity models, and thorough crosstalk analysis. This is imperative to address the signal and power integrity challenges faced when developing an optical DSP SoC. Synopsys’ 112G Ethernet PHY IP offers low latency, flexible reach lengths, and maturity on 5nm process technology, making it an ideal solution for hyperscale data center, networking, AI, optical module, and Ethernet switch SoCs. In addition, Synopsys offers an EDA Design Suite that delivers high-quality results with optimized power, performance, area, and yield. Synopsys’ AI-driven EDA Design Suite provides solutions to boost system performance and accelerate time-to-market, making it an essential component of a successful solution for the high-performance computing infrastructure market.

Summary

Synopsys provides high-performance, low-latency solutions that accelerate the development of advanced Ethernet switch and networking SoCs. To learn more about Synopsys’ comprehensive IP solutions, their comprehensive EDA Design Suite and their AI-Enhanced EDA Suite, visit the following pages.

Synopsys’ comprehensive IP solutions

Synopsys’ comprehensive EDA Suite

Synopsys’ AI-driven EDA Design Suite

Also Read:

Multi-Die Systems: The Biggest Disruption in Computing for Years

Taking the Risk out of Developing Your Own RISC-V Processor with Fast, Architecture-Driven, PPA Optimization

Feeding the Growing Hunger for Bandwidth with High-Speed Ethernet

Takeaways from SNUG 2023

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More Software-Based Testing, Less Errata

More Software-Based Testing, Less Errata
by Bernard Murphy on 04-24-2023 at 6:00 am
Categories: Cadence, EDA

Palladium Protium

In verification there is an ever-popular question, “When can we stop verifying?” The intent behind the question is “when will we have found all the important bugs?” but the reality is that you stop verifying when you run out of time. Any unresolved bugs appear in errata lists delivered with the product (some running to 100 or more pages). Each bug accompanied by a suggestion for an application software workaround and commonly a note that there is no plan for a fix. Workarounds may be OK for some applications but crippling in others, narrowing market appeal and ROI for the product.

A better question then is how to catch more bug escapes (those bugs that make it silicon and are documented as errata) in the time allocated for verification.

Errata root-causes

I’m not going to attempt an exhaustive list but among deterministic digital root-causes three stand out. Bugs that are almost but not quite unreachable, bugs that are simply missed, and bugs resulting from incompleteness in the spec. The best defense against the first class is formal verification. Ross Dickson and Lance Tamura (both Product Management Directors at Cadence) suggest that defenses against the second and third classes are greatly strengthened by running more software testing against the pre-silicon design model.

Industry surveys indicate that 3 out of 4 designs today require at least one silicon respin. Running software on real silicon (even if not good silicon) seems like an easy way to run extensive software suites to catch most errata, right? That’s a slippery slope; respins are very expensive, reserved for what absolutely cannot be caught pre-silicon. And early silicon is not guaranteed be functional enough to run all the software required to expose errata bugs. It is more practical and cost-effective to trap potential errata pre-silicon.

You might think that errata would commonly result from complex sequence problems. In fact many are surprisingly mundane, arising from simple two factor or exception conditions. Here are a few cases I picked at random from openly available errata:

  • When a receive FIFO overruns it becomes unrecoverable
  • A bus interface hangs after master reset
  • After disabling an FPU another related function remains in high power mode

I’m sure the verification teams for these products were diligent and tested everything they could imagine in the time they had available, but still these bugs escaped.

Spec problems

The spec class of issues is especially problematic. Specs are written in natural language, augmented by software test cases and more detailed requirements. All of which attempt to be as exact as possible but still have holes and ambiguities.

Software and hardware development teams work in parallel from the same specs but in different domains. The software team uses an ideal virtual model of the hardware to develop software which will eventually run on the target hardware. At the same time, the hardware team builds a hardware model to implement the spec. Both faithfully design and test against their reference. When they hit a place where the spec is incomplete, they must make a choice. Assume A or assume B, or both or neither, or maybe it doesn’t matter?

Unsurprisingly this doesn’t always work out well. Best case, the hardware and software teams have a meeting, ideally with architects, to make a joint decision. Sometimes, when the choice seems inconsequential and schedule pressure is high, a choice is made locally without wider consultation. A good example here is bit settings in configuration registers. Maybe a couple of these are presumed to be mutually exclusive, but the spec doesn’t define what should happen if they are both set or both cleared. The hardware team chooses a behavior which doesn’t match the software team’s expectation. Neither team catches the inconsistency when running against their own reference models. A problem emerges only when the real software runs on the real hardware.

For ChatGPT fans, ChatGPT and equivalents are not a solution. Natural language in inherently ambiguous and incomplete. To the extent that ChatGPT will identify a hole, it must still make a choice to plug that hole. Absent documented evidence, that choice will be random (best-case) and may be inconsistent with customer requirements and use-cases.

Software-based verification/validation

Granting that no solution can catch all bug-escapes, software-based testing is a pretty good augment to hardware-based testing. As an example, driver and firmware teams develop and debug their code against the virtual model to the point they can find no errors. When a hardware prototype becomes available, they run against that model to confirm that a task can be completed in X cycles, as expected. Routinely, they also catch bugs that escaped hardware verification.

OK, so the verification team adds more tests to catch those cases but there are two larger lessons here. Software testing is inherently complementary to hardware testing. The software team has no interest in debugging the hardware; they just want to make sure their own code is working. They test with a different mindset. This style of testing can and does often expose spec inconsistencies.

Escapes due to unexpected two or more factor conditions or exceptions are more likely to be caught through extensive stress testing. Software-based testing is top-down, the easiest place to experiment with stress tweaks (such as throwing in a reset or overloading a buffer). This might require some hardware/software team collaboration but nothing onerous.

More software-based testing needs hardware assist

You’re not going to run software-based testing on a hardware model without acceleration, the more of it the better if you really want to minimize errata. Prototyping to run as fast as possible, closely coupled with emulation to debug problems, both extended with virtual models for context. You should check out Cadence Protium, Palladium, and Helium. Cadence also offers demand-based cloud access to Palladium.

Also Read:

What’s New with Cadence Virtuoso?

AI Assists PCB Designers

AI in Verification – A Cadence Perspective

Speculation for Simulation. Innovation in Verification

Podcast EP156: A Chat With Shankar Krishnamoorthy About Strategy and Outlook for EDA Development at SNUG

Podcast EP156: A Chat With Shankar Krishnamoorthy About Strategy and Outlook for EDA Development at SNUG
by Daniel Nenni on 04-21-2023 at 10:00 am

This is another special edition of our podcast series. SemiWiki staff writer Kalar Rajendiran spoke with Shankar Krishnamoorthy, General Manager, Electronic Design Automation Group for Synopsys at the recent SNUG meeting,

Shankar discusses how Synopsys is focusing on hyperconvergence and implementation of AI across the entire design flow. The market drivers that are making these changes critical are also discussed, along with a view of future EDA development and the outlook for EDA startups.

The views, thoughts, and opinions expressed in these podcasts belong solely to the speaker, and not to the speaker’s employer, organization, committee or any other group or individual.

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ASML Wavering- Supports our Concern of Second Leg Down for Semis- False Bottom

ASML Wavering- Supports our Concern of Second Leg Down for Semis- False Bottom
by Robert Maire on 04-21-2023 at 8:00 am
Categories: Lithography, Semiconductor Advisors, Semiconductor Services

Semiconductor False Bottom

-ASML weakness is evidence of deeper chip down cycle
-When ASML sneezes other chip equip makers catch a cold
-Will backlog last long enough? Will EUV demand hold up?
-“Unthinkable” event, litho cancelations, could shock industry

ASML has in line quarter but alarm bells ring on wavering outlook

ASML reported Euro6.7B in revenues and Euro4.96 in EPS which was more or less in line with expectations. There had been reports coming out of Asia of order slowdowns and cancelations coming out of TSMC and potentially others which had sent the stock down ahead of earnings today.

Those rumors seem at least partially true if not fully true as ASML talked about order book re-arrangements and softening outlook.

ASML’s backlog which has been viewed as solid as a rock extends out to mid 2024 but now appears to be seeing some weakening in the second half of 2024. Right now the order book is not full for the second half of 2024 but management expects (hopes) it will fill.

A defensive conference call

The tone of the conference call was not the normal bullish bravado of a market dominating monopoly but sounded much more defensive about weakening prospects and defending their outlook which was perhaps more concerning than the comments themselves.

Thinking the “unthinkable” litho cancelations & pushouts

It has been long thought in the industry that no chip maker in their right mind would cancel or delay a litho tool for fear of getting back on the end of a very long line later on and being in a much worse position.

That fear seems to have gone away as there is clearly movement in ASML’s order book with tools pushed out and other customers pulled in the fill the otherwise empty slots.

We would have also expected ASML to have already been sold out for 2024 by now but they are only booked halfway through the year with some uncertainty about the second half.

As with the overall chip industry itself, trailing edge technology appears to be holding up better as DUV demand seems good (maybe better in some ways than EUV). One of the issues is that much of the DUV demand is coming out of China which puts even that demand at risk due to embargo issues

In short the order book has softened from a virtual rock to quivering Jello. ASML will be fine but other equipment makers will fare far worse. When ASML sneezes other equipment companies catch a cold.

ASML will likely skate through the down cycle with enough of a backlog to make it to the other side without seeing their earnings and financials take a hit. Their backlog and monopolistic position will help protect the company as we doubt there will be much actual downside impact before the down cycle turns. So they remain the strongest, safest ship in the current semiconductor storm.

Other equipment makers not so much

If you don’t buy litho tools you need less other tools, less deposition, less etch, less yield management etc; etc;. Litho tools are the locomotive that pulls the semiconductor equipment train along with the caboose being assembly and test.

After ASML the company that typically has almost as strong backlog is KLAC whose yield management tools are needed to support all those new litho tools driving to smaller feature sizes. KLACs backlog in some tools is multi year in nature and their business model and “steady Eddy” performance is based on working from a backlog position. We would expect similar softness on KLACs backlog, likely worse than ASML as you don’t need the KLAC yield management tools if you don’t have or delayed the ASML litho tools.

The same obviously goes for both AMAT and LRCX who typically run with even less backlog than KLAC, usually more of a “turns” business during “normal” times.

Semiconductor makers are voting with their feet (capex budgets)

Its clear that chip makers, such as TSMC, Intel & Samsung and others , must feel that demand is not getting any better any time soon if they are willing to delay critical litho tools. This suggests a deeper, longer semiconductor downturn than currently or previously thought. If you think the industry will “bounce back” you are not going to delay a new litho tool. This has very ominous repercussions across the industry as it belies the view of a quick recovery.

Is this a “second leg down” in the semiconductor down cycle?

Our long held view of the semiconductor industry is to look at things through two distinct components of supply on one side and demand on the other.

In our view, it is very clear that the “first” leg down in the current down cycle was primarily supply side driven as the industry built capacity like crazy after it was caught short through the Covid and supply chain crisis. The industry built and built, with obviously reckless abandon until we “overshot” the needed supply and now found ourselves in an oversupply condition that started the current down cycle.

Meanwhile, the demand side has softened and perhaps the downward pressure on demand has somewhat accelerated along with global macro economic concerns.

It feels to us that there is a high likelihood of a “second leg” to the current chip cycle that is driven more by weakening demand than the first half which was driven by oversupply.

This could potentially be worse as supply issues tend to be easier to fix than demand issues as you can control supply if you are a chip maker as we have seen with the memory market and Micron and Samsung taking capacity and product off line to support pricing.

The problem is that there isn’t that much that the industry can do to stimulate demand for chips. Lowering pricing on chips used in cars doesn’t stimulate demand.

The stocks

Chip stocks have been on a roll since the beginning of the year and in our view have become prematurely “overheated”. Many investors have falsely thought that we were at a bottom in the industry and it was time to buy back in as it could only get better from here.

That thought process was not unreasonable as in prior down cycles we saw a bottom after a few quarters and it was a signal to buy and it turned out well. That may not be the case if it was more of a “false bottom” created by supply cut backs that then fell apart when demand weakened creating a further drop.

If the current down cycle were just a supply side issue, chip makers would not delay/cancel litho plans so this is clear evidence that chip makers are bracing for a longer, deeper downturn that has more demand side concerns on top of the prior supply side concerns.

2023 is clearly not a recovery year. We think that typical, unsubstantiated hopes for a second half recovery in 2023 will likely fade as chip companies report and analysts figure it out. The bigger question now becomes when/if in 2024 we will start to see a recovery.

Fab projects and equipment will be pushed out much further, especially in the very over supplied memory space. The main point of light in the industry remains non leading edge semis which has been saving many in the industry including DUV for ASML.

ASML is certainly not a good beginning of earnings season for chips and likely will send a much needed chill through the chip stock market.

About Semiconductor Advisors LLC
Semiconductor Advisors is an RIA (a Registered Investment Advisor),
specializing in technology companies with particular emphasis on semiconductor and semiconductor equipment companies. We have been covering the space longer and been involved with more transactions than any other financial professional in the space. We provide research, consulting and advisory services on strategic and financial matters to both industry participants as well as investors. We offer expert, intelligent, balanced research and advice. Our opinions are very direct and honest and offer an unbiased view as compared to other sources.

Also Read:

‌Gordon Moore’s legacy will live on through new paths & incarnations

Sino Semicap Sanction Screws Snugged- SVB- Aftermath more important than event

Report from SPIE- EUV’s next 15 years- AMAT “Sculpta” braggadocio rollout

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Design IP Sales Grew 20.2% in 2022 after 19.4% in 2021 and 16.7% in 2020!

Design IP Sales Grew 20.2% in 2022 after 19.4% in 2021 and 16.7% in 2020!
by Eric Esteve on 04-21-2023 at 6:00 am
Categories: IP, IPnest, Semiconductor Services

Top5 Royalty 2022 BIG updated

Design IP revenues had achieved $6.67B in 2022, after $5.56B in 2021, or 20.2% growth after 19.4% in 2021 and 16.7% in 2020. IPnest has released the “Design IP Report” in April 2023, ranking IP vendors by category (CPU, DSP, GPU & ISP, Wired Interface, SRAM Memory Compiler, Flash Memory Compiler, Library and I/O, AMS, Wireless Interface, Infrastructure and Misc. Digital) and by nature (License and Royalty).

The main trends shaking the Design IP in 2022 are very positive for most of the IP vendors, especially for 4 of the Top 5: ARM, Synopsys, Imagination and Alphawave growing by more than the market, respectively 24.5%, 22.1%, 23.1% and 94.7%. Rambus and Alphawave benefit from their recent IP vendor acquisition, PLDA, AnalogX and Hardent for the first, OpenFive for Alphawave, but their organic growth was already great. In summary, the Top 10 IP vendors have grown by 24.6%, when all others by 5.3%, this can be seen as an effect of consolidation, as a Top vendor will make proportionally more design win than “others”.

Synopsys, Alphawave and Rambus growth confirm again in 2022 the importance of the wired interface IP category (with 26.8% growth) aligned with the data-centric application, hyperscalar, datacenter, networking or AI. But the good performance of ARM and IMG proves the come back of the smartphone industry and the emergence of automotive as new growth vector for Design IP.

Looking at the 2016-2022 IP market evolution can bring interesting information about the main trends. Global IP market has grown by 94.8% when Top 3 vendors have seen unequal growth. The #1 ARM grew by 66.5% when the #2 Synopsys grew by 194% and Cadence (#3) by 203%. Market share information is even more significant. ARM move from 48.1% in 2016 to 41% in 2022 when Synopsys enjoy a move from 13.1% to 22% and Cadence is passing from 3.4% to 5.4%.

This can be synthetized with the comparison of 2016 to 2022 CAGR:

  • ARM CAGR 8.9%
  • Synopsys CAGR 19.7%
  • Cadence CAGR 20.3%

When the global IP market has seen 2016 to 2022 CAGR of 11.8%.

The strong information is that the Design IP market has enjoyed 11.8% CAGR for 2016-2022! Zooming on the categories (Processor, wired Interface, Physical, Digital), market share 2017 to 2022 evolution clearly shows interface category growth (18% to 24.9%) at the expense of processor (CPU, DSP, GPU) declining from 57.6% to 49.5%. When Physical and Digital are almost stable, as it can be seen on the above picture.

Being very synthetic, Design IP markey is split in quarter:

  • Processor (CPU, DSP, GPU) weigth one half (two quarter)
  • Wired Interface weight one quarter
  • Digital and Physical one quarter in total

IPnest has also calculated IP vendors ranking by License and royalty IP revenues:

Synopsys is the clear #1 by IP license revenues with 29.7% market share in 2022, when ARM is #2 with 25.2%. Alphawave, created in 2017, is now ranked #4 just behind Cadence, showing how high performance SerDes IP is essential for modern data-centric application (Alphawave is leader for PAM4 112G SerDes available in 7nm, 5nm and 3nm from various foundries, TSMC, Samsung and Intel-IFS). Analyze written last year stay valid!

The 2022 ranking for Royalty shows ARM’s dominance with 63.8% market share, not a surprise if we consider their customer installed base and their strong position in the smartphone industry. Imagination Technologies (IMG) position of #3 is consistent. Interesting to notice, both companies are expected to IPO in 2023…

With 20% YoY growth in 2021 and 2022, the Design IP industry is simply confirming how incredibly healthy is this niche within the semiconductor market and the past 2016 to 2022 CAGR of 11.8% is a good metric!

IPnest has also run a 5-year forecast (not yet published) for Design IP, to pass $10B in 2025 and predict a future CAGR (2021 to 2026) of 16.7%. Optimistic? This year-to-year 2022 growth is on-line with this prediction…

Eric Esteve from IPnest

To buy this report, or just discuss about IP, contact Eric Esteve (eric.esteve@ip-nest.com)

Also Read:

Interface IP in 2021: $1.3B, 22% growth and $3B in 2026

Stop-For-Top IP Model to Replace One-Stop-Shop by 2025

Design IP Sales Grew 19.4% in 2021, confirm 2016-2021 CAGR of 9.8%

Chiplet: Are You Ready For Next Semiconductor Revolution?

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S2C Helps Client to Achieve High-Performance Secure GPU Chip Verification

S2C Helps Client to Achieve High-Performance Secure GPU Chip Verification
by Daniel Nenni on 04-20-2023 at 6:00 am
Categories: EDA, Prototyping, S2C EDA
1 Comment

S2C Prototyping 2023

S2C, a leading provider of FPGA-based prototyping solutions, has helped a client achieve high-performance secure GPU chip verification. With the help of S2C’s Prodigy prototyping solution, the client was able to start software development and hardware-software co-design early, leading to accelerated time-to-market for their entire chip product and enabling them to seize early opportunities in the market.

A Graphics Processing Unit, or GPU chip for short, is a specialized processor designed to handle image and video data. Its primary purpose is to perform many parallel computations to process massive data more efficiently. Due to this characteristic, GPUs are highly suitable for graphics rendering, video encoding, and decoding tasks. In recent years, GPUs have also found widespread use in areas like deep learning, scientific computing, and cryptography because of their significant speed improvements in computation.

One of the major challenges for GPU vendors is the intense competition in this field. S2C’s customers was a new entrant to the GPU market, and they tackled this challenge by applying a shift-left strategy to accelerate the GPU chip’s time-to-market and seizing the market’s early opportunities. The client’s design cycle spanned 18 months from concept design, development, and verification, tape-out delivery to chip sample illumination, which included their own GPU core IP, processor architecture optimization, compilers, verification models, software drivers, and system compatibility. The entire process was completed in one go.

S2C prototyping solution included a diverse selection of daughter cards such as PCIe, HDMI, DDR, and GPIO that made it incredibly convenient to build a GPU verification system. Our client opted for S2C’s Prodigy Virtex UltraScale VU440 Logic Systems, which consisted of one Quad platform and one Dual platform, and achieved an impressive FPGA utilization rate of 71%.

As the client stated, “S2C’s Prodigy prototyping solution enabled us to achieve high-performance secure GPU chip verification, which helped us to gain an advantage in the competitive GPU market. With S2C’s support, we were able to accelerate our time-to-market, which was  critical to our success.”

For the new IC design verification, the IC verification team plans to use Prodigy S7-19P, which is based on the Xilinx Virtex UltraScale+ VU19P FPGA. The S7-19P prototyping platform provides 1.6 times more logic and delivers a 30% performance boost compared to its predecessor, making it an excellent choice for hype-scale design verification.

S2C is a leading global supplier of FPGA prototyping solutions for today’s innovative SoC and ASIC designs, now with the second largest share of the global prototyping market. S2C has been successfully delivering rapid SoC prototyping solutions since 2003. With over 600 customers, including 6 of the world’s top 15 semiconductor companies, our world-class engineering team and customer-centric sales team are experts at addressing our customer’s SoC and ASIC verification needs. S2C has offices and sales representatives in the US, Europe, mainland China, Hong Kong, Korea and Japan.

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What’s New with Cadence Virtuoso?

What’s New with Cadence Virtuoso?
by Daniel Payne on 04-19-2023 at 10:00 am
Categories: Cadence, EDA

Virtuoso Place and Route min

It was back in 1991 that Cadence first announced the Virtuoso product name, and here we are 32 years later and the product is alive and doing quite well. Steven Lewis from Cadence gave me an update on something new that they call Virtuoso Studio, and it’s all about custom IC design for the real world. In those 32 years we’ve seen the semiconductor process march along Moore’s Law from 600nm using planar CMOS, scaling down to the FinFET era below 22 nm, reaching GAA at the 3nm node. Clearly the EDA tool demands have changed as smaller nodes brought on new physical effects that needed to be modeled and simulated to ensure first silicon success.

The focus of Cadence Virtuoso Studio is to help IC designers take on the present day challenges through six areas:

  • Increased process complexity
  • Handling 10,000s of circuit simulations
  • Design automation and circuit migration
  • Heterogenous integration
  • AI
  • Sign-off, in-design verification and analysis

The Virtuoso ADE (Analog Design Environment) allows circuit engineers to explore their analog, mixed-signal and RFIC designs through schematic capture and circuit simulation. The architecture of Virtuoso ADE has been revamped for better job control, reducing RAM usage, and speeding up simulations by using the cloud. For one example the RAM required to run Spectre on 10,000s of simulations was reduced from 420MB down to just 18MB for simulation monitoring, while expression evaluations decreased from 420MB of RAM to just 280MB.

Updates to the Virtuoso Layout Suite include four choices of place and route technology, each suited to the unique task at hand through the Virtuoso environment:

Four P&R Technologies

DRC and LVS runs are part of physical verification, and running these in batch mode, fixing and repeating, leads to long development schedules. In-design verification allows the interactive use of DRC and LVS while working on an IC layout, so feedback on what to change is quickly highlighted, accelerating productivity. A layout designer using Virtuoso Layout Suite benefits from in-design verification using the Pegasus DRC and LVS technology.

Chiplets, 2.5D and 3D packaging span the traditionally separate realms of PCB, package and IC design domains. Virtuoso Studio enables the co-design and verification of packages, modules and ICs by:

Looking into the near future you can expect to see details emerge about how AI is being applied to automatically go from an analog schematic into layout  based on machine learning and specifications. These auto-generated trial layouts will further speed up a very labor intensive process. A second development area for AI to be applied is the problem of migrating custom analog IP to a new process node. Stay tuned.

Analog IP migration

Early customers of Virtuoso Studio include Analog Devices for the co-design of IC and package, leading-edge IC consumer designs at MediaTek, and AI-based process migration at Renesas.

Summary

Virtuoso Studio has put into release 23.1 some impressive new features that IC design teams can start using to be more productive. The Virtuoso infrastructure has changed to meet the challenges of Moore’s Law, simulations with 10,000s circuit simulations are practical, RFIC and module 2.5D/3D co-design are supported, in-design DRC/LVS verification takes much less time, and AI is being applied to automate analog tasks.

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Electronics Production in Decline

Electronics Production in Decline
by Bill Jewell on 04-19-2023 at 6:00 am
Categories: Semiconductor Intelligence, Semiconductor Services
2 Comments

Unit Change Electronics 2023

Shipments of PCs and smartphones were weak in 2022 and continue to decline in 2023. For the first quarter of 2023, IDC estimated PC shipments dropped 29% from a year earlier. This follows a 28% year-to-year decline in 4Q 2022. For the year 2022, PC shipments declined 16% from 2021, the largest year-to-year decline in the history of PCs. The outlook for the rest of 2023 is not encouraging, with Gartner forecasting a 12% decline in year 2023 PC shipments. The PC market collapsed after the end of the boom during the COVID-19 pandemic. Global economic uncertainty is contributing to the current PC market weakness.

IDC estimated smartphone shipments in 4Q 2022 dropped 18% from a year earlier, resulting in an 11% decline in year 2022 shipments, the largest decline ever. Smartphones rebounded from a 7% decline in 2020 (driven by pandemic-related production slowdowns) to 6% growth in 2021. As with PCs, the current economic uncertainty is impacting smartphone shipments. DigiTimes estimates 1Q 2023 smartphone shipments dropped 13% from a year ago. IDC projects a 1% decline in smartphone shipments for the year 2023.

The weakness in PCs and smartphones is reflected in production data from China. Although some electronics manufacturing has shifted out of China in the last few years, China still accounts for about two-thirds of smartphone production (according to Counterpoint Research) and the vast majority of PC production. China’s three-month-average change versus a year ago (3/12) for PCs turned negative in April 2022 and the decline has been greater than 20% for the last three months ending in February 2023. Mobile phone production change (primarily smartphones) was negative for seven of the last nine months, with the decline in the last two months greater than 10%. Total China electronics production measured in local currency (yuan) showed 3/12 change turning negative in January 2023, the first decline since the early months of the pandemic in 2020.

Countries which have benefited from electronics production moving out of China are also showing a slowdown. Malaysia and Taiwan both reported strong electronics production growth in most of 2022, with 3/12 change mostly above 20% and approaching 30% in several months. In the latest data, 3/12 change dropped below 10% in January for Taiwan and in February for Malaysia. Vietnam 3/12 change was over 20% in 2Q 2022 but has been decelerating each month since June 2022. Vietnam’s 3/12 change turned negative at minus 1% in February 2023, the same as China. In March 2023, Vietnam was at minus 5%.

The more mature electronics manufacturing regions have not been as affected by the slowdown in PCs and smartphones. The United States, Japan, United Kingdom and the 27 countries of the European Union (EU 27) are less dependent on consumer electronics. Electronics production in these countries is largely industrial, automotive, communications infrastructure and enterprise computing. However, many of these countries are experiencing moderating growth. The EU 27 3/12 change in electronics production ranged primarily between 10% and 20% for most of 2022. In January 2023, the 3/12 changed dropped to 7%. The U.S. experienced a moderate acceleration in 3/12 growth through most of 2022, increasing from 3% in January 2022 to over 8% in the last three months of 2022. U.S. growth had been decelerating in 2023, dropping below 6% in February. In contrast, Japan and the UK electronics production was in decline for much of 2022. Japan 3/12 turned positive in October 2022 and was 4% in February 2023. The UK 3/12 turned positive in October 2022 at 0.9%. After a 0.7% decline in January 2023, the UK 3/12 bounced back to 0.8% in February 2023.

As stated in our February 2023 Semiconductor Intelligence newsletter, the outlook for semiconductors in 2023 is bleak. In addition to weak end demand in many electronics markets, many semiconductor companies are dealing with excess inventory and pricing pressures. Despite a few bright spots such as automotive (March 2023 newsletter), the overall semiconductor market will not recover until end demand of key end equipment such as PCs and smartphones reverses its decline.

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Mitigating the Effects of DFE Error Propagation on High-Speed SerDes Links

Mitigating the Effects of DFE Error Propagation on High-Speed SerDes Links
by Kalar Rajendiran on 04-18-2023 at 10:00 am
Categories: EDA, Siemens EDA

Pre and Post FEC BER as FEC Matrix size Reduces

As digital transmission speeds increase, designers use various techniques to improve the signal-to-noise ratio at the receiver output. One such technique is the Decision Feedback Equalizer (DFE) scheme, commonly used in high-speed Serializer-Deserializer (SerDes) circuits to mitigate the effects of channel noise and distortion. The DFE scheme relies on decisions about the levels of previous symbols (high/low) to correct the current symbol. This allows the DFE to account for distortion in the current symbol that is caused by the previous symbols.

However, DFE error propagation can occur when feedback signals are incorrect. Following are some of the situations that contribute to DFE error propagation. DFE circuits operate by using feedback to equalize the received signal, but this feedback can also amplify noise and distortion in the signal. In some cases, the feedback can overemphasize certain frequencies, leading to an increase in noise at those frequencies and an increase in the Bit Error Rate (BER). The mechanism also relies on accurate timing to make decisions about the incoming data. If there are timing errors in the feedback loop, these errors can propagate and cause additional errors in the received data. Nonlinear distortion in the transmission channel can also cause DFE circuits to make incorrect decisions about the received data. These errors can then propagate through the feedback loop and cause additional errors in the data. As the DFE scheme makes decisions based on previous decisions, errors in the feedback loop accumulate over time.

As noted above, DFE error propagation can lead to increased BER and reduced signal integrity. Increased BER in turn leads to data errors and reduced system performance. Reduced signal integrity results in increased jitter and reduced eye height, leading to errors in data transmission. As a result, DFE error propagation can significantly impact the performance of high-speed SerDes circuits and must be carefully managed to ensure reliable data transmission.

But existing statistical simulation methods cannot properly consider DFE feedback, and time-domain simulations become impractical for low error probabilities. A whitepaper by Siemens EDA presents a statistical solver that can find bit error ratio or symbol error ratio in the presence of isolated and burst DFE errors. The solver can accurately consider transmit and receive jitter, crosstalk aggressors, noise, and other impairments, and is useful in choosing forward error correction (FEC) schemes and parameters. The paper defines the essential building blocks of the statistical solver, including the main elements of statistical analysis, the convolution term for DFE feedback, the symbol error probability matrix, and the flow to find BER/SER metrics. It also discusses the use of a modified iteration process to find the probability distribution of symbol error groups and presents experimental results of the statistical solver.

The following are some excerpts from the whitepaper.

Building statistical eye that includes DFE errors

The method is considered a Markov chain with a transition operator defined by a function that transforms known error probabilities into new error matrices measured from the eye diagram. The process involves building a statistical eye diagram from which error probabilities are calculated. The iterations continue until the error probability matrices become equal up to machine precision. The iterations are consistent and converge to the same solution regardless of initial settings. Two examples are given to illustrate the convergence of the iterations with statistical solver in the loop. The first example is the simulation of a 200GBASE-CR4 link, while the second is the CEI VSR channel with 4 taps DFE.

Choosing FEC parameters

The size of FEC needed to correct the error groups can be determined by analyzing the probability parameters distribution of error groups found from statistical simulation.

The simulations with FEC demonstrate the importance of knowing the burst error distributions for the proper choice of FEC parameters while keeping the FEC-induced latency to a minimum. The statistical analysis results can be relied upon for the purpose of FEC parameter optimization for a large variety of channels.

Summary

The whitepaper presents a novel statistical simulation method that considers the effect of DFE error propagation in SerDes links. Simulation speeds are sufficient to make this approach a routine part of the design process that require multiple channel compliance evaluations and FEC parameter optimization. You can download the entire whitepaper from here.

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