New Pain Points In System-Level Design

Chip companies will have to start doing a lot more than just developing chips if they expect to boost their profits—and their stock prices.

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By Ed Sperling

One of the strange things about downturns is they force companies to re-examine what they do and question what kind of value they bring to the market. This is particularly true in the semiconductor world, where the average selling prices for chips has been sliding for the better part of two decades.

In the case of the chip industry, which is heavily cyclical, that leaves lots of time for reflection. And the latest trend seems to be somewhat different than the last downturn, which produced, ‘Do more with less.’ The current direction seems to be, ‘Do much more,’ although not necessary with less.

“Companies have to deliver whatever they were delivering before plus more value,” said Ian Mackintosh, president of OCP-IP. “For IP vendors, they need more software content—drivers, broader connectivity and more validation of the process they use. For EDA providers, they need more offerings. There will be a lot of fallout as a result of this downturn, and people will make acquisitions they couldn’t make a year ago. Products will get into a stronger sales channel. This is the classic integrate or die. Consolidation will do that for them.”

But there are two inherent business problems that have to be solved before system-level design can extract more value for its efforts. The first is a broader definition of exactly what’s involved in designing and developing a system rather than just a chip.

“EDA has to become the general contractor for design,” said Jim Hogan, a private investor in the technology world. “If you’re building an SoC, you’re most likely creating platforms for a vertical market using third-party IP and your own secret sauce. The problem is verification. You can’t run it with the application.”

That helps to explain some of the recent acquisitions and changes under way within the semiconductor tools world. Synopsys, for one, bought Synplicity for its FPGA tools and part of ProDesign to move into ASIC prototyping and verification. As Synopsys CEO Aart de Geus said, “All trends that existed before the downturn have not changed.”

De Geus noted that in the future, makers of semiconductors will have to deliver embedded software and even applications, which is the reason behind acquisition of prototyping companies like Virtio. “Everyone would like to have the chip before the software and they want to have the software before they have the hardware. These two statements may sound like contradictions, but increasingly they’re not.”

The other piece of the equation that needs to be ironed out is complexity. That helps explain Mentor Graphics’ intense focus on TLM 2.0, which is basically black-box technology to speed design across multiple areas. IP-XACT, which is aimed at making IP more plug-and-play, fits squarely into the TLM 2.0 world, as well.

Standards become stronger in dowturns because there are fewer dollars available for developing new technology. Most R&D budgets are flat to down. Even de facto industry standards, which typically precede the adoption of technology by standards bodies, grow stronger in a downturn because there is less money to challenge them.

“If you look at the systems space, ARM is the de facto standard in the wireless world,” said Hogan. “In the interconnect space, Sonics and Arteris are making a play, and the interconnect strategy will become important. It also will be important to have IP that works together. Chip Estimator is like the yellow pages of IP and IPExtreme is repacking silicon process IP blocks, but so far no one has a total solution.”

The same challenge persists in the software world. There is no uniform test bench strategy, so far, and application software is not part of that entire process. “Right now we have articulation points in software signoff, but with the application all we have is intent verification,” Hogan said.

In system-level design, the real mantra might literally be to think outside the box. Chris Rowen, founder and CTO at Tensilica, said the value in devices isn’t what’s in the box, but how it works on the network.

“It’s all about what it enables,” Rowen said. “When they put it on their customers table it has to now all the protocols and standards used by the end consumer, no matter what market it’s in. Chips need to know what the home services look like.”

And for the companies that design chips, or which create the tools to design and develop them, the end of the downturn could be a rather rude awakening to the new rules of the game.