The semiconductor industry changed radically in mid-January, according to Wally Rhines, CEO of Mentor Graphics, speaking at the Globalpress Summit meeting in Monterey yesterday.
“It’s a good time to be a reporter. There’s a great deal going on to change the character of the industry,” said Rhines.
The key moves were the collapse of the Crolles Alliance, with alliance member NXP pulling out at the end of the year, and with STMicroelectronics and Freescale significantly scaling down their commitments to the Alliance, which was created to develop advance process technologies.
Texas Instruments is another company ending its own process technology development for digital chips.
With process differentiation rules out of the equation, companies will have to rely on design differentiation, according to Rhines. This means expertise at four levels: system architecture innovation; proprietary IP blocks; implementation efficiencies and higher yields.
Rhines said that, by using system-level language and synthesising it directly from C, quite dramatic improvements in speed and the reduction of logic functions could be achieved. “People are finding very efficient architectures to do things," said Rhines.
On the intellectual property (IP) side the independent IP industry is now growing at 20 per cent a year. Rhines said it was worth about $2bn this year and he expects it to double by 2010.
Implementation efficiency and yield maximisation are key skills and, to level up the playing field between integrated device manufacturers (IDMs) and the smaller players, specialist Asic layout companies like alchip, eSilicon and Verisilicon, which have these specialist skills, are taking designs at very competitive prices.
Asked if the IDMs can survive without process differentiation, with design differentiation becoming widely understood and with an independent third-party IP industry growing rapidly, Rhines said: “The IDMs today have a lot of expertise.”
Asked how many IDMs he expected to see survive, Rhines replied: “I expect to see about ten."
"The memory people because they have to and the analogue people because they want to, and a company like Intel has a clear advantage in having its own advanced digital CMOS process technology and doing specialised, proprietary things to it,” said Rhines.
For more on this and to follow David Manners as he travels through Silicon Valley see Mannerisms blog