Business models combine across the supply chain.
By Jack Harding
I recently participated in a panel hosted by TSMC. The other panelists represented EDA, IP and Foundry market segments. We were asked to comment on new business models as a means to facilitate more design-starts in companies large and small and, otherwise, make it easier to be in this business with increasing NREs and greater complexity.
To my delight the EDA guy talked about software as a service. The IP guy talked about novel payment plans and strategic deals that concentrate the efficient development of basic IP into a few suppliers. The foundry guy from TSMC talked about how his company isn’t a bank. Well, two out of three isn’t bad. But he did say the foundry is receptive to new business and payment ideas that put more chips in production solving more problems.
These are all admirable goals and strategies, but all of these have to come together for the model to truly work. The new terminology is value chain producer, which combines SaaS, IP databases and services, unique financing to amortize NRE into production, finance WIP and manage die banks and other things that save the customer money.
It’s great the industry is recognizing that innovation must come in our business models, as well as our laboratories. It’s great that TSMC is stepping up to its leadership role for these discussions. And it’s not so bad that the VCP model has emerged as a way of taking advantage of all of these models.
–Jack Harding is the CEO of eSilicon
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