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Fab or Fab-less, that is the question.

by Sebastien Mirolo on Sun, 31 Mar 2013

An recent article in USA Today, Why semiconductor ecosystem is more fragile than ever, triggered a lot of thinking inside fortylines. After all if our customers have trouble to manufacture their integrated circuits (ICs) we have a bigger problem on our hands than lowering the cost of innovation through cloud computing.

The big game

Leading-edge digital processing technology is not a game for the faint heart. The technology prowess necessary to work at the limits of physics and deliver seamlessly bleeding edge processors in high volume is very much cost intensive.

Intel decided to spend $13 billion in 2013 to develop and build future manufacturing technology. That is what is required to be the sole player having FinFET in production Today.

Each process node requires deeper and deeper integration between EDA tools and manufacturing facilities. Samsung is still definitely in the game, manufacturing is a critical piece of their strategy. TSMC will boost Capital Expenditures in 2013 to Record $9 Billion in order to stay in the game.

With total revenue for the entire EDA industry around $5 billion in 2011, you have to wonder why TSMC has not bought Synopsis, Cadence or both yet. Maybe Samsung will. It has a stronger history of managing software, a more international and diverse work-force, and will directly benefit from owning EDA expertise.

Lenovo is going into the chip business to secure access to parts it needs, either directly or through leverage in negotiation with other semiconductors companies. Apple might not have other choice than going into manufacturing itself.

Fabless

So where does that leave our market of vibrant innovative fabless companies?

Fabless companies that would be somewhat immune from the silicon manufacturing chock are either far enough remote from it or have found alternatives.

Intellectual Property suppliers are candidates. Traditionally those companies provide hardware blocks that end-up into SoCs. Recently new breeds of Intellectual Property suppliers have also emerged. These are really software application providers with an accelerator component in silicon. Even though many of those IP companies consider themselves in the hardware business, hardly any of their engineers have seen the inside of a factory or worry about yield and supply chain management. As the software world moves towards multi-threaded distributed design technologies, differentiation between Hardware and Software IP suppliers is becoming arbitrary.

For companies making their revenue actually selling physical ICs, control on the supply chain is too important to the bottom line to be left unattended.

Improving latency is hard, dammed hard. Fortunately a lot of emerging opportunities around Big Data processing require throughput more than latency. This could translate to architecture that leverage older process nodes. Analysis and correlations on large volumes of data also means that interconnect technologies might be more important than shrinking silicon technology for many new designs.

Smaller vendors might benefit from out-of-phase sales cycle. For example, if you are selling processors that go primarily into fridges, your biggest volumes might be expected in spring when factory utilization is low, giving you a chance to get your batch through on time.

There hasn't been a revolution like 3D printing in the IC world yet but reading through Producing Semiconductors from Graphene and A Computer Inside a Cell, Manufacturing of ICs could economically scale to very low volume in the future.

In conclusion, you can still build a vibrant IC business even if you are not Intel or Samsung but you need to deal with the manufacturing constraints head-on first.

Weekly Reading List

by Sebastien Mirolo on Tue, 1 Jan 2013

Short list updated weekly of articles and papers we read and found worth mentioning.

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Week in the News

by Sebastien Mirolo on Sun, 7 Oct 2012

In the bare metal space, there is a lot more going on these days than shrinking technology process. FinFET, 3D ICs and Producing Semiconductors from Graphene are just a few of the advances putting pressure on the current generation of EDA tools - translate space for innovative companies.

If you are to believe the following announcement, the economics to continue 8-bit and 16-bit micro-controller product development are not good. Manufacturing cost compared to 32-bit alternatives might still be cheaper; though maybe not for long.

On the other side of the spectrum, between Bezos, CIA invest $30M in quantum computing startup and Spurned by VCs, a chip startup turns to Kickstarter, there is funding for innovative high-end processors. Not convinced yet? Take a look here; $25M in 2008, at the heart of the financial crisis.

Finally, this latest article fits in a long series of indicators that the future will be heterogeneous multi-cores system-on-chips. While the ripples into operating systems, compilers, programming languages, etc. will soon be felt, some of my personal predictions are:

  • Future languages, optimizers and linkers will have to be built with heterogeneous target in mind.
  • We will see more of the new programming languages borrowing from verilog and vhld because most of the future problems will require parallel thinking.
  • FPGA are unbelievably cheap and older processor technology are becoming accessible to smaller budget so maybe we will have some language and tools that can do both, compile to an Hardware macro and executable code on a SoC at the same time.
  • Compilers are next to move into the cloud because compilation is a compute-intensive problem that benefits from readily available compute clusters.

Read this week (Aug 12th)

by Sebastien Mirolo on Sun, 12 Aug 2012

Electronics

After the successful Curiosity landing on Mars, here a great article on energy harvesting designs. In advanced micro-electronics, news on DARPA THz Electronics program are worth mentioning as well as TSMC investment in ASML. In that last article I found the following quote that will resonate with many here:

“The IT industry loves to natter on about the benefits of innovation,
and consumers tend to fixate on whatever shiny new thing comes to
market,” King wrote in a July 11 report. “But getting from the here
and now to that glistening, magical innovative future requires a hell
of a lot of hard, practical work in materials science, design,
manufacturing and production. In essence, successful vendors are a bit
like ballet stars—displaying a level of grace on stage which, when
successful, never hints at the months and years of effort required
to appear effortless.”

While fortylines focuses on front-end chip design, there is also a lot of change coming up in foundries business models as well.

Thoughts

Open source democracy and democratic open source are two articles on the H this week that have potential to start interesting debates.

Business

Cash as oxygen is great analogy between businesses and humans. When there is no more, your business dies. When there is too much cash you run the risk divers call Nitrogen Narcosis, or in plain English, feeling drunk underwater; deadly. In both cases, checking metrics regularly will help you stay healthy. In that respect, a clear post on business metrics can be found on redpoint blog.

Good tips in Secrets of a Master Negotiator.

In the business section this week, there was also an insightful article on acqui-hire and a thought provoking article on job creation.

Start-up outside the social scene

The New York Times article on FarmLogs deserves a special mention this week.

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