Storm Before The Calm

The whirlwind of new announcements will continue for awhile, but what happens when the buzz dies down?

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The announcements out of ARM and Intel over the past couple week—and presumably from rivals AMD, MIPS and even Nvidia in coming weeks—are more than just a struggle for one-upmanship.

The goal is much more far-reaching and the stakes are significantly higher than who has the fastest processor or core or even the lowest-power version. In the past year there has been a massive push to expand ecosystems, cement relationships that are cross-industry, and to venture into adjacent markets as well as solidifying positions in existing markets.

These changes are the result of both economic and technology shifts. The convergence of functions into a single device, or at least a couple devices, is opening up markets on a scale that many companies never dreamed possible. Billions of smart phones can mean billions of chip sales. They also will mean a demand for better tools and ready-fit IP that works with both the gate-first and gate-last process technology at whatever power level is required.

For the design and IP industries, this is very good news in the short term. The demand for faster, smaller and cheaper will require some very complex tools because the problems to be solved are orders of magnitude more complex at each new node. At 22nm we likely will see new materials, new transistor structures, new power management techniques, new interface fabrics, and probably even new techniques for bonding and packaging multiple chips.

How all of this plays out in the long-term, however, remains to be seen. After a massive grab for market share, there ultimately will be some consolidation that reduce the number of market segments, the number of very expensive platform designs and ultimately the number of customers for all the tools and IP that will continue to be needed.

At that point there will be a battle to convince those shrinking number of customers that they need to pay top dollar for the value they’re receiving, because fewer customers gives the bargaining edge to the customer rather than the vendor. This is still a couple nodes off, but it may be time to start thinking about this—and possible adjacent markets that need exploring by both customers and tools vendors.

–Ed Sperling