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Semiconductor IP Dilemma?

Semiconductor IP Dilemma?
by Daniel Nenni on 01-01-2012 at 3:00 pm
Categories: Uncategorized
14 Comments

Just how many hands have touched your SoC design by the time it goes to manufacturing? Clearly the more hands that touch it, the more complex the design is, making it more difficult to meet your product requirements. The commercial semiconductor IP dilemma is that not only are you using the same IP as your competitors, you are exponentially increasing the number of hands that touch your SoC.

The semiconductor IP dilemma was discussed in detail during a 2+ hour conversation, a $70+ sushi lunch with Dr. Jen-Tai Hsu, the Senior Director of the Global Unichip Corp. (GUC) USA R&D Center. Here is a tip: do not take me to lunch at one of those places where the boats of sushi float by because I will sink a fleet of them! Before joining GUC, Jen-Tai spent 12+ years at Intel so he knows IP. He also has an impressive list of patents and a dozen more pending. Four years ago GUC was an IP baron design services provider. Now GUC has a full lP portfolio with custom IP design groups in Taiwan, China, and Silicon Valley. Global Unichip is now a truly flexible ASIC provider!

Semiconductor design and manufacturing outsourcing has expanded our world to $300B+ so I’m a big fan of it. It’s all about design starts and whatever we can do to enable them. That’s why I work closely with the foundries and emerging EDA and IP companies, to keep those design starts coming. Services are also an important design start enablement function but scaling a price centric business in today’s economy is daunting. In fact, I have yet to see it done successfully. eSilicon, Open-Silicon, Alchip, Verisilicon, etc…….. There are more than a hundred semiconductor design services companies competing for the same business, using commercial semiconductor IP, with cost as the primary differentiator. A hundred of hungry dogs eating from one bowl, not a pretty sight!

Based on the overwhelming success of the GUC business model (tight integration with the number one foundry and flexible ASIC strategy) here is what needs to happen moving forward:

The Intel Foundry Group will buy eSilicon. Intel must have a buffer between them and the foundry customer to be successful. They must also have intimate knowledge of the commercial semiconductor design ecosystem which eSilicon certainly has.

Samsung Foundry Group will buy Open-Silicon. Samsung has the same challenges as Intel so if they are truly serious about the foundry business they will also need a customer buffer.

SMIC will buy VeriSilicon, or maybe VeriSilicon will buy SMIC? They are already neighbors so this is an easy one.

TSMC has GUC, UMC has Faraday, and GlobalFoundries has Socle. With advance process nodes it is not possible to have tight integration with multiple partners, just ask Tiger Woods.

As the semiconductor design and manufacturing landscape continues to evolve over the next decade, the question is: Who will be left to compete with TSMC and GUC?


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Micron Races to Its Future

Micron Races to Its Future
by Ed McKernan on 12-31-2011 at 2:01 pm
Categories: Uncategorized
1 Comment

Perhaps no semiconductor company took it on the chin harder the last half of 2011 than Micron. And yet, perhaps no company was racing as hard as Micron to make a radical changeover. Micron is considered a bell weather on the overall health of the semiconductor industry given that DRAM, NAND and NOR Flash are used in some combination in every piece of electronic equipment. But sometimes economics and geopolitics come to the fore and, watch out, the DRAM market tanks. For Micron, the Future is not standard commodity DRAM, it is High Performance Servers and NAND Storage. Both have processor vendors as partners and some interesting innovation on the horizon.

Jim Handy, the storage and semiconductor analyst, wrote an article in Forbes this past week that made me stop for a second and think about the difference we see in DRAM economics vs. the traditional kind taught in college and MBA classes. The traditional one says that markets seek a balance between supply and demand and that price is the arbitrator. If supply overshoots, then a lower price results and demand picks up to restore the balance. In Jim Handy’sarticle, he includes a chart (see to the left – source:Forbes) that shows over the last 20 years DRAM demand has been constant despite gyrations in pricing. Therefore, if prices drop dramatically there is not a significant uptick in demand. Meaning this doesn’t adhere to normal economic theory. Micron, Samsung, Elpida and Hynix would be much better off forming a cartel and agreeing to only build capacity at less than the 50% bit yearly growth rate that has been observed over time.

The alternative to the cartel, that won’t happen, is to move to other greener pastures. NAND Flash has the high growth rate of Smartphones, Tablets and now ultrabook PCs behind them and in the near term should provide some shelter but Micron will need to forge partnerships with processor vendors to develop higher performance links between the CPU and Memory in order to create value at the expense of trailing edge DRAM. DRAM growth in the Apple ecosystem is not happening in Smartphones and Tablets: it’s one chip (the lowest density) and done.

The most interesting initiative that Micron has on the table is the joint venture with IBM to develop what they call the Hybrid Memory Cube. Essentially it is a 3D structure of stacked memory chips connected in parallel to a memory controller or processor that is at the base of the substrate using Through Hole Silicon Vias (TSVs). The technology offers space savings but the most important aspect is increasing the bandwidth between processors and memory. Micron claims that bandwidth on today’s prototype is 128GB/s or a 10X improvement over DDR3.

Over the past ten years as the Data Center build out has increased, operating power and cooling has grown generation to generation to the concern of many. The culprits are the processor and DRAM. Ten years ago it was mostly from the processor. Now it is evenly split between the two as the DRAM footprint has grown and the processor to memory performance gap has widened. Some of the footprint growth is due to VMWare and virtualization.

Intel has been able to capitalize on the growing DRAM power trend by recommending that data centers use the highest performing, highest price processor, which happens to have the largest on chip cache. These large caches allow more of the workload to stay on chip and be performed at a lower power budget (fewer clock cycles) than going off-chip to DRAM. If Micron were able to close the performance gap significantly then some of the value of the server would migrate away from the processor to DRAM. However, the processor vendors will likely take the step of packaging it all together and offering it as a combined solution and thus retain control of the server platform pricing. This is where Intel, AMD, nVidia and IBM are surely headed. Whoever gets there first has an obvious advantage.

The 3D Hybrid Memory Cube is due to be in production second half of 2013. Micron’s biggest challenge will be to build a business model around it with processor and data center partners that allow it to escape the dreadful economics of standard DRAM and capture the value add of a much higher performance/watt metric that Intel has put in place with its Xeon server processors. I can see Intel expanding its current relationship with Micron, which is based on a joint manufacturing agreement on NAND to include 3D DRAM, in order to maximize its control and pricing of the servers targeting data centers.

Full Disclosure: I am long AAPL, INTC and ALTR


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America Heads Into a Generational Turn

America Heads Into a Generational Turn
by Ed McKernan on 12-30-2011 at 7:24 pm
Categories: Uncategorized
3 Comments

America has received a gift whose consequence and magnitude is just now unfolding before our eyes. Taken to its limits, it may in the course of the next decade finally free us from many of our foreign entanglements while lifting the economic burdens from the working majority that has seen their wages stagnate for the past 40 years. I am writing of course about the natural gas boom that has taken hold across a large part of the country, but more specifically in an area I am most familiar with – northern Pennsylvania. For the first Christmas in several years I have returned to my hometown of Williamsport and discovered a blue-collar turnaround that resembles in some ways the emerging semiconductor industry of the 1970s. It’s a bottoms up led opportunity that is embraced by many and out of the sight of the governing class.

Williamsport proper is a town of 30,000 that sits at the center of the natural gas drilling and is the largest city within Lycoming County, which has a population of only 116,000 even though it is larger than Rhode Island. The city plays host to the Little League World Series every August somehow figuring out how to house the thousands of visitors who make their way – mostly by car from the larger airports that are anywhere from 100 to 200 miles away. Geographically Williamsport is unique in that it is a city that is 200 miles equally distant from New York, Baltimore, Philadelphia, Pittsburgh, Buffalo and Washington DC and thus was attractive as a locale for industry trying to reach markets with large populations.

A generation ago (call it 40 years), the economic decline of middle America, represented by communities in Pennsylvania, Ohio, Michigan, Illinois was set in motion by the forfeiture of energy independence to OPEC. In 1973, oil prices quadrupled. In 1979, there followed a further tripling. The natural inclination of high school graduates like myself was to go off to a different part of the country where opportunities were greater. For me, the logical choice was high tech.

For the past two years I have following the economic revival across the country that is based on the new drilling technique called horizontal fracking that applies to oil fields in North Dakota and gas fields in the Marcellus Formation, which stretches from upper state New York down through Pennsylvania and into Ohio and West Virginia. In a matter of just a handful of years, the estimates of retrievable natural gas have exploded to several hundred years. In addition, the cost to drill has dropped dramatically – at a rate that would look like a Moore’s Law Curve.

The first order impact of the natural gas drilling is that gas is now 75% cheaper than oil on an equivalent energy basis. The drop in price is so dramatic that many northeasterners who are still heating with oil are shelling out $2,000 to make the conversion of homes to gas from oil and estimating a two-year payback. The second order effect is much more interesting. Story after story abounds of various industries (e.g. chemical and steel) springing back to life because of cheaper natural gas (see story here).

Williamsport has experienced boom times before. In the 1870s and 1880s it was the lumber capital of the world. The rolling hills of the Appalachian Mountains that surround the city provided the lumber that was cut then transported by the Susquehanna River down to the lower cities and eventually to the Chesapeake. At one time the city had more millionaires per population than any in the world (The High School Mascot is named “The Millionaires”). The river, which facilitated the transport of lumber, had a tendency to flood after days of heavy rains. And so in 1889 it came to an end when one such flood wiped out the lumbering infrastructure.

As I drove into town this week, I saw hotel after hotel springing up along the highway that runs along the river (that is now protected by a 36 foot high dike). The hotels are 30-40% occupied by the hundreds out of town workers brought in by Texas oil and gas companies to supplement the local hiring. A Starbucks and Panera Bread Restaurant have moved in. Just beyond the downtown are the many smaller homes built in the early 1900s to 1930s. Some are in need of repair and serve as reminders of what high energy prices during the past 40 years can do to a family budget All in all though the resurgence is noticeable and in 2010 Williamsport was ranked as the 7[SUP]th[/SUP] fastest growing city in the US.

If one were to compare it to the semiconductor industry, my guess is that the fracking technology is at the place semiconductors were in the early 1970s. The technology has been in development for many years but just became economical in the last 3-4. The widespread use of it and the focus in remote areas such as the mountains and small towns that surround Williamsport mean that it will be hard to stop as the vested interests outweigh environment roadblocks.

In the early 1970s, the semiconductor industry was just starting to blossom. In quick succession, the DRAM, EPROM and Microprocessor were born. ASICs, PLDs, FPGAs and Flash followed in the 1980s and 1990s. Robert Noyce and Gordon Moore could hardly have imagined in the early 1970s that semiconductors would be a $300B business today.

The message that I take away from my experience in the semiconductor industry and the hometown revival of Williamsport is that great industries are a bottoms up activity that are little noticed until they become significant. During these past four years a top down mandate to develop solar and wind power has failed to make more than a minor dent and then only with great subsidies and political intervention. In this same time period, gas has had a greater drop in price and is now even more economical that coal for generating electricity.

I will make an out of the box prediction that I have been thinking about for some time. The 2012 presidential election will be decided in Pennsylvania. In 2000 it was Florida and in 2004 it was Ohio. This election will come down to the one state that has the electoral heft to swing the election and also has The Major Theme to be debated over by a great majority of the people of this country. Are we to base our future on solar and wind that are proving to be uneconomical for at least another 10 years or do we remove the roadblocks to natural gas development that leads to significant job growth and energy independence. The significance of this theme is that I believe it will lead to a reshaping of the American Economy and the Political make up that is to follow. Just as the South turned Red with Reagan in 1980 and both coasts turned blue with Clinton in 1992, now what has derisively been labeled the Rust Belt for 40 years may turn Red with America’s Generational Turn.


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Happy Holidays From SemiWiki

Happy Holidays From SemiWiki
by Daniel Nenni on 12-25-2011 at 4:38 pm
Categories: General


It has been an amazing year for us so we wanted to thank you all for being a part of the Semiconductor Wiki Project!

The SemiWiki Bloggers are off this week and will return the first week of January. During this time there will be a major SemiWiki software update. There will be performance upgrades and lots of new features to enhance the SemiWiki experience.

Safe travels and have a Happy New Year!

-SemiWiki Staff

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eTale of Christmas: DSK, sex, economy and geopolitics

eTale of Christmas: DSK, sex, economy and geopolitics
by Eric Esteve on 12-21-2011 at 11:14 am
Categories: General

Former International Monetary Fund (IMF) chief, Mr Dominique Strauss-Kahn, has spoken at a conference organized by a Chinese Internet company, NetEase.com Inc. in Beijing last Monday, and he was rather pessimistic about the future of European economy, at least if politician keep focus on Continent’s dept problem and not enough on growth. What is the connection with semiconductor? Simply that SC is a very good indicator for economy trend, usually with a 6 months move forward in respect with the mass market. And also because global economy behavior dictates the SC health: when there is a recession, you will never see healthy SC market.

Dominique Strauss-Kahn is recognized to be one of the best economists worldwide, and he is also a French politician. More precisely a socialist (don’t worry, we are not talking about Lenine, Staline or Kim Jung Il, and the difference with the right wing is more and more tight), and before the “event” happening in the Sofitel of New York last May, he was credited by various opinion poll of the highest chance to win the next election in France in May 2012, against Nicolas Sarkozy. He was also a sex addict that he admitted to be at least privately; this was considered as his main weakness. Back in May this year, he had two identified enemies: Nicolas Sarkozy, his direct competitor for the 2012 election in France (President de la Republique), and Vladimir Putin (the former President of the Russian Federation, current prime minister, and most probably future President of the Russian Federation).

Putin was against Strauss-Kahn as the IMF chief, because of strong divergence at the economy level; let’s call this for geopolitical reasons. A couple of weeks before the “sex affair” at the Sofitel, Strauss-Kahn was paranoid at such a level than when having private discussions with some of his politician friend, in France, he was asking them to remove the SIM card from their smartphone! Does that mean that the “sex affair” at the Sofitel was a conspiracy? Not necessarily, and we prefer to let the court deciding! But…Sarkozy and Putin have both a strong harmful power, and even greater would they decide to team, so let say that the hypothesis of a conspiracy is not null.

The bottom line is that Dominique Strauss-Kahn will never be “President de la Republique” in France, has resigned from his IMF role shortly after the affair has been known. This is normal, as both positions require spotless reputation. The pity is that now Strauss-Kahn, once again a world class economist, is speaking in China, and not in Europe or in the USA, because the “politically correct” behavior (which was in the past strong in the USA only, and now also in Europe) prevent him to speak here. I guess the Chinese people who have invited Strauss-Kahn should be very happy to have him in their conference, and when remembering Mao Tse Tung and his sexual hyper activity (he was supposed to be surrounded by pretty, consenting young women during the time he was president) they should probably laugh about our “politically correct” behavior. Don’t you think we could take a break (in respect with our politically correct race) and concentrate on economy, semiconductor growth instead of decline, in the countries where most of the modern inventions, from diode to transistor to microprocessor to smartphone to…, have taken place?

If not, we will probably get the gold medal (in the USA) and silver (in Europe) of the most “politically correct people, leaving the most efficient person goes to other places, helping them to develop their economy (which is good for these countries and that I support) and finally end up building “industry free” territories in our countries, that I strongly regret!
That was my eTale of Christmas.

By Eric Esteve from IPnest

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T’is the season for…semiconductor forecasts

T’is the season for…semiconductor forecasts
by Paul McLellan on 12-20-2011 at 3:10 pm
Categories: Global Semiconductor Alliance, Semiconductor Services

T’is the season to be jolly…and to predict the next year’s semiconductor market.

KPMG does a regular survey of senior executives in semiconductor companies to get their outlook on the year ahead. The message this year is mixed. 41% of executives expected their business to grow by more than 5% next year, which sounds not too bad until you realize that last year it was 78%. The survey included over 150 executives, half from companies over $1B in revenue

The Semiconductor Business Confidence Index is at 46 compared to 60 the last couple of years (higher is better).

GSA also announced that so far this year there have been nearly 100 semiconductor acquisitions and mergers, down a little from a year ago.

Not surprisingly, the big drivers for semiconductor are wireless (probably over 2 billion cell-phones will be sold next year), computing (cloud server and laptops etc) and consumer (video game, TV, DVR etc).

The big indicator in semiconductor is capital equipment, because this is where companies put (or don’t) their money where their mouth is. Revealed preferences, an economist would say, which is much more important than what executives say in a survey. Here many executives plan to sit on their hands next year, with only a quarter expecting it to increase next year. Since a fab doesn’t get built in a month or two, this is an indicator of capacity that won’t be in place for 2013. There is also huge variability between different companies. Intel is clearly investing a huge amount whereas other companies are still switching to a fab-lite or fabless model where capital expenditure is not required (well, by the company: TSMC still needs to invest plenty). And the other big foundry, Global, is clearly struggling. They have a big fab in New York that is meant to come on line but they are also losing a lot of their semi-captive AMD business to TSMC.

The amounts involved are staggering. Intel is talking about $10B fabs. And because it can’t risk having just one fab (in case it burns down or something) they need to build two. But even Intel can’t fill two fabs hence all the speculation about Apple, Qualcomm, Xilinx and others using Intel as a foundry.

So semiconductor companies have had a two-year boom and are assuming next year will be slow. To some extent these can become self-fulfilling prophecies depending on how much capacity is put in place. If not enough, product will be on allocation even if there is end market demand, too much and prices crater creating end market demand.

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View from the top: Chris Rowen

View from the top: Chris Rowen
by Paul McLellan on 12-20-2011 at 1:41 pm
Categories: Uncategorized
1 Comment

I met with Chris Rowen, CEO of Tensilica, last week to get his outlook on the year ahead.

He gave me an interesting quote from his time at Silicon Graphics. “We wanted to be very fast in development not to be first to market but so that we could be the last to start.”

A lot of what Tensilica does is bound up with evolving standards in audio, video and wireless. The team that is able to start last has the advantage of a more stable standard where the implementation tradeoffs are better understood. In many ways this is one of the prime drivers of Tensilica’s business: by using programmable processor cores instead of synthesizing dedicated Verilog, the design cycle is shortened and the implementation is more flexible allowing for late tweaks to algorithms (perhaps even after the product has shipped).

The most sophisticated customers license the Xtensa processor generator. They know exactly what architecture they want to create and exactly what software they want to run on it. In fact they regard their capability to do that as means of differentiation from their competition.

Further down the pyramid are people wanting Tensilica to help them configure the instruction set architecture to run their software efficiently. And then there are people looking for a turnkey solution, a processor and software pre-configured for a given function.

Chris has actually re-organized the company to reflect that they have expertise and business lines in various areas such as audio or LTE (4G wireless). These business units need to have relationships with partners, such as Duisberg-based Mimo-on for LET, and standard drivers, such as Dolby. This allows them to build complete sub-systems using their own processor generator technology under the hood. Since so much of these businesses are standards based, there are roadmaps going out for years: a sequence of audio standards or wireless baseband standards. This where the “be last to start” approach is so valuable. There is no point in getting to market before the market wants product (there is no market for handsets for a wireless standard until base-station buildout is in progress, no market for a video decoder until there is some video being encoded with the standard and so on).

Tensilica doesn’t have the same sort of lock-in that ARM or Intel has since end-users generally don’t program their processors. But as their processors get used more and more, and customers invest on top of them in software and expertise, there is some partial lock-in

One challenge is that their products are used in high volume products in the latest process technologies, so they can’t be lowest-common-denominator or they lose too much performance and burn too much power. But the flexibility of the architecture means they can hit very aggressive budgets. For instance they recently had an internal competition to build a 30 giga-MAC signal processor (at 40nm) and the winner consumed just 25mW.

I asked Chris about their financials but he said they don’t give out details. But he did tell me that they have 160 people, are quite profitable, and cash-flow positive. So you can do some math and work out roughly how big they must be. They are hiring aggressively and moving into new lines of business.


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Why AMD is Up Q4, While Intel is Down

Why AMD is Up Q4, While Intel is Down
by Ed McKernan on 12-19-2011 at 5:45 pm
Categories: Foundries, Intel Foundry

Immediately following Intel’s announcement that they expected Q4 revenue to come up short by $1B, Rory Read the new CEO of AMD, countered that they were on track to meet their original guidance (see article). Furthermore, “In 1Q and 2Q, maybe you see some manifestations, but I wouldn’t bet against the supply chain,” Read said at a Raymond James conference. “They’re very resilient.” This leads to the question of what is really happening in the PC market and who to believe. My best guess is that Intel decided sometime in November to give up short-term market share for the opportunity to ramp 22nm faster and win back share by mid 2012.

When Seagate reported its earnings the end of November, the CEO mentioned in a Business Week article that at the moment they could take advantage of WD’s shortfall with an immediate 40% increase in hard drive pricing. Alternatively, Seagate would offer customers willing to sign up for one to three years an increase of only 20%. Major PC OEMs were presented with an opportunity that they had not seen in sometime. If they signed on with the new HDD pricing and used an AMD processor, they could gain share with respect to white box PC manufacturers (the ones who would be paying up to 40% more on HDDs). In addition by switching to AMD they would be able to maintain end system price points by offsetting hard drive price increases with the processor price savings. So if it plays out as it has in past history, the branded PC makers should gain share and increased profits this quarter.

On the Intel side of the ledger, it is likely that the OEMs went to Intel first to appeal for lower processor pricing to offset the hard drive price increases and therefore maintain system price points, especially in the low end consumer market. My guess is that Intel knew that this was coming, however was debating whether to fulfill this quarters numbers or alternatively to focus the company on ramping 22nm faster, getting yields up and driving the ultrabook form factor to the eventual $500 price point sooner rather than later. If one role plays the different scenarios from shortage of HDD in Q1 and recovery in Q2 to the extreme case of full recovery late in Q4, the answer still comes up to ramp 22nm earlier.

Given the above scenario, Intel will now execute on an accelerated Ivy Bridge PR strategy that starts with pre-announcements and system demos starting at the CES show in early January and continuing throughout Q1. This will force a market freeze on many PC purchases in Q1, especially mobiles as consumers wait for the new Ivy Bridge PCs. The market stall will reduce the impact of the HDD shortage and shift the allocation of HDDs in Q1 and Q2 towards systems utilizing the new 22nm Ivy Bridge Mobiles at the expense of all other PCs. Intel’s PR and manufacturing ramp will effectively obsolete a large part of the mobile PC market by sometime in March. System Vendors need to be in synch with Intel or they will lose a lot of money with any overbuilding of inventory that is not sold out prior to the April Ivy Bridge Launch. Intel will also incentivize the retail channel to turn over the floor models overnight. The Intel corporate sales team will inform CIOs that it is best to wait until the new systems arrive. Servers will still be 32nm Sandy Bridge through the 1H 2012.

Just as the rumors of Apple’s iPhone 4S in August and September slowed down the sales of the iPhone4, Intel has the power to cause the PC market to wait for Ivy Bridge’s launch in April. Bottom line is that AMD will enjoy revenue and market share gains in Q4, but beyond that there is great uncertainty. The CES show in January will be very telling. Expect 22nm Ivy Bridge, pre-production notebooks to be widely distributed to press and reviewers so that glowing reviews keep consumers on the sidelines until the official April Launches. The net effect of all Intel’s strategy is that they give up near term revenue and market share to maximize 1H 2012 revenue and get 22nm up the yield curve quicker.

Full Disclosure: I am Long AAPL and INTC

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What Will 2012 Bring The Semiconductor Ecosystem?

What Will 2012 Bring The Semiconductor Ecosystem?
by Daniel Nenni on 12-18-2011 at 4:30 pm
Categories: EDA

During my annual holiday meal with one of my favorite EDA icons some rather bold predictions were made. On his side it was more of what he would LIKE to see happen, on my side it was more of what will HAVE to happen for the semiconductor ecosystem to thrive in the coming years.

Mike Gianfagna (Viva Italia!) spent 15+ years with RCA/GE Semiconductor Division before going to the dark side (EDA). I worked for Mike at Zycad, after that he was a VP at Cadence then eSilicon, CEO at Aprio, and now VP at Atrenta. Mike knows semiconductor design and manufacturing, believe it. Mike also knows wine, is a great visionary, and an excellent lunch date (he paid)!

Foundry Consolidation!
The number of pure-play foundries will continue to decline. 20nm is here and VERY expensive. Intel, Samsung, and TSMC will succeed at 20nm, all others will fail in regards to time-to-market, yield, and/or margins. 450mm is coming in 2015, Intel, Samsung, and TSMC are already building 450mm fabs. The other foundries (GFI, UMC, SMIC) will become what I call boutique foundries like Jazz-Tower and the others. This is all me, Mike predicts you will be able to count the number of foundries below 28nm on one hand, which I also agree with.

Changing EDA Landscape!
Mike commented that the coming process nodes require even tighter integration of design and manufacturing which will pressure foundries to start buying EDA companies. #1 foundry TSMC would acquire #1 EDA company Synopsys and consume the tools for logic synthesis down to mask data preparation. The other parts of Synopsys would be spun out forming a new EDA venture. GlobalFoundries, ever the follower, would then be forced to acquire Cadence and do the same thing. But what about Mentor I asked? This flurry of EDA M&A will get the Carl Ichans of the world excited and they will collectively “roll-up” EDA bits and pieces, including parts of Mentor, into new EDA contenders. What will the new EDA companies look like? According to Mike they will have a much higher level of abstraction in search of new sources of revenue. I guess you would call it EDA180 versus EDA360? Knowing the foundries as I do this is pure fantasy.

Electronic design automation software and semiconductor manufacturing are two very separate and distinct entities, like oil and vinegar. EDA originally spun out of semiconductor manufacturing (IDMs) for this reason. TSMC will never outright buy into EDA because they don’t have to. Instead they will continue to lead EDA with the Open Innovation Program (OIP) and customer pull through. Who are TSMC customers? It would be easier to list the number of companies that don’t work with TSMC. I can’t think of any but I’m sure there is at least one. Even Intel, IBM, and Samung are TSMC customers. GlobalFoundries on the other hand, doesn’t have customer pull though yet, so buying into EDA would be a very big step forward. It would also be fun to watch! Unfortunately with the GFI reorganizations and budget cutting I do not see that happening anytime soon.

The New World Order!
My version of the coming EDA landscape centers around the continued domination of Synopsys, or as one SemiWiki commenter put it “I, for one, welcome my new Synopsys Overlord!” Seriously, who is going to challenge Synopsys now that they have Magma and the largest silicon proven semiconductor IP portfolio? In my humble but expert opinion all of the other EDA minions will continue to fragment until private investment returns and funds a credible resistance. May the force be with us!