Virtual IDM Progress Report

Complexity and a need for lower power are driving tighter partnerships. Gaps remain, but vertically integrated companies aren’t perfect

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By Ed Sperling
Complexity, tight power budgets, disaggregation of the supply chain and market fragmentation are conspiring to force much tighter partnerships among companies that develop different pieces of an SoC, as well as those that collaborate on even larger systems. This confluence of factors has forced the rules for how companies work together to be rewritten, but even within that framework the reconfigured supply chain is far from perfect.

While companies are choosing partners more carefully, the sheer number of interactions on a complex SoC and the multitude of markets that need to be served means that not everything goes together as well as predicted. IP, for example, is still a black box technology. Software is never completely bug free. And no matter how many use cases are run, errors increase proportionately with complexity.

One question being asked these days is whether is it any worse in a disaggregated ecosystem than at an integrated device manufacturer? The answer is that it depends—on the companies working together, what they’re working on, and how paranoid companies are about sharing their secrets with their partners.

What may be surprising, though, is that the same factors apply even within the same company. Territorial engineering managers or bad relationships between software and hardware teams, or between one office and another in different locations, can turn a problem even within an IDM into an intractable one.

“I’ve seen IDMs that collaborate more poorly under one roof than different companies working together,” said Gregg Bartlett, CTO of GlobalFoundries. “It comes down to the nature of the relationship. I’m talking to some companies five years ahead of tapeout. As effective as the traditional IDM model can be, you also can have a lack of trust within a company.”

Tighter partnerships
One thing that has changed significantly is the number and depth of relationships between companies. That means fewer companies working together, but those that are working together have to be willing to provide far more information to each other than in the past. This is no longer just a simple transaction. It’s an ongoing relationship of dependencies, where you’re only as good as your own partners.

“The early adopters started this five years ago,” said Chris Rowen, CTO at Tensilica. “Leaders emerge and there is a natural connection. But the whole value chain is evolving. Chips are more complex and chipmakers are drawn into hardware, software and the services around the platform. This is why you’re seeing outsourcing of more complete subsystems, which pull together the critical elements of the PHY and drive throughput and power.”

To some extent, it also is a natural way of cleaning up the supply chain. Those with the best technology or the best market reach are natural choices for partnerships, which is why there has been a flurry of acquisitions lately.

“We see a couple reasons why this is happening,” said Amit Rohatgi, vice president of mobile solutions at MIPS. “One is that technology is not only getting complicated, it’s also getting expensive. The 28nm node is not cheap and it’s very complex. A mask set is $2 million. We were getting a lot of lower-cost technology out of China, but even they’re starting to rethink their 28nm strategy. The second reason is that we’re dealing with a new currency. It was frequency, the number of cores and graphics. Now it’s time to market. So if you put two or three pieces together, will it work?”

More often that not, putting those pieces together requires additional engineering. But the rule of thumb is that the more pieces that are integrated by one vendor, the better the results—one of the drivers toward stacked die and subsystems that may consist of an entire die.

“The old outsourced distributed model doesn’t work that well anymore,” observed Mike Gianfagna, vice president of corporate marketing at Atrenta. “The virtual IDM model, where things are put together like they are in a more monolithic organization and very tightly integrated might be one of the only ways to get this to work. The platform idea already has been applied to power distribution and power control. If the strategy works and it can be proven in silicon, then customers will flock to you. But it all has to work together. Predictability is important.”

Even in areas where parts are sold discretely, the tide is shifting toward pre-integration—or at least fully characterizing those parts to play well with others and speed up time to market. Nothing is sold “as is” anymore—not even parts that can be programmed.

“There are still discrete solutions where the selling process is the same,” said John Daane, chairman and CEO of FPGA maker Altera. “But even with DSPs you now get information about how to implement the DSP. The value proposition is still your product, but you’re selling it at the system level. There are two problems that we’re facing. One is the rising cost of design. The second is the rising cost of transistors. When you take into account all factors, the cost of transistors is going up.”

Holes in the supply chain
Aart de Geus, chairman and co-CEO of Synopsys, said that when partnerships work they work well, because both companies have a stake in seeing that partnership succeed. But that doesn’t happen all the time, and it certainly doesn’t happen for a complete system.

“It’s very uneven,” said de Geus. “The degree of collaboration is very high, and we’re seeing it from the EDA community all the way to manufacturing, from IP to tools, and in design and software. There is no question that people who cooperate well with each other get better results, and if you look at virtual IDMs these companies have to work together. Today’s subsystems are yesterday’s board, and any time you can economically reduce risk and complexity you win.”

He’s not alone in that assessment. Grant Pierce, president and CEO of Sonics, terms partnering for creating more complete solutions at the subsystem level “inevitable.”

“Still, there’s no simple way to do that,” he said. “It takes a lot of work on the part of companies building a subsystem. That part is difficult. We touch on enough things that touch on gaps, and the challenge is that all the pieces aren’t in place yet.”

What typically drives those kinds of relationships is a complex solution that is best provided by expertise from more than one company, within a reasonable amount of time, and for a reasonable cost. This works better in some segments than others—particularly commoditized sectors—and it works better in some areas than others, notably those where there is competition or a tight market window—or both.

“It depends on the application,” said Ted Tewksbury, president and CEO of Integrated Device Technology. “It can work on susbsystems if you work together. We developed a flash controller with Micron where they provided the digital controller and we added our expertise in PCI express. The semiconductor industry has reached a level of sophistication where companies recognize their value add, which is why we have an increasing amount of segmentation of the value chain.”