What are IDMs for? With every skill-set in the industry being practised by specialist companies with a competence as good as an IDM, how will IDMs maintain their competitiveness?
At a recent industry do, Wally Rhines, CEO of Mentor Graphics, asked Satoru Ito, CEO of top ten IDM Renesas Technology: "Will Renesas, over time, become a system integrator of IP?"
It's a good question. If you want a chip designed, the new business model design houses like Verisilicon, eSilicon and Alchip, take a design on-board at no cost or risk to the customer, only requiring payment on delivery of finished, working silicon.
If you want IP, go to third party IP developers, or foundries which are spending hugely on developing IP.
If you want process, go to a foundry. TSMC seems to be as advanced as Intel at 45nm. This may be why IDMs seem very keen to ditch one of their last competitive differentiators. Infineon, STMicro, Freescale, NXP and TI are all abandoning advanced CMOS manufacturing between 90nm and 45nm.
If you want software, go to the universities. "More and more chips are differentiated by the software that runs on them", says Chris Turner, of Cambridge Consultants, The problem for big semiconductor companies is that so much of the innovative software thinking comes out of universities, entrepreneurs and engineers working at home away from the day job. The challenge for the large semiconductor companies and IDMs is how to partake in this process."
Once you've stripped out software, design, process and IP what is there left for an IDM to do? Well system integration of IP is an answer. But one can't see that supporting the infrastructure costs of a $10 billion IDM.
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