Slide 21 of 46
We believe the huge investments needed to fuel the silicon manufacturing industry are likely to lead to a significant international consolidation in manufacturing and design. Even today, major US and Japanese semiconductor manufacturers are outsourcing manufacturing to Taiwanese and regional foundries. Some top-tier system houses of today that also manufacture their own silicon are likely to partner for future production rather than reinvest alone. Most successful chip design companies (e.g. S3, C-Cube) are already tightly-integrated with their foundries. In an effort to remain competitive, we expect foundries to demand a share of the profits from successful high-volume standard parts (processors, ASSPs, etc.).
The likely outcome of this trend is towards increased difficulty in gaining reliable access to COTS Silicon other than via standard architectures. The notion of a stand-alone IP industry, selling on-chip components directly to system designers for integration, or even via standard EDA systems does not seem practical or likely for high-performance, state-of-the-art designs. It is more likely that this component IP will be developed in conjunction with the foundries or design houses themselves and will be presented to the designer as part of an integrated, overall design flow.
Rather than a free market of IP, we expect to see an increased emphasis in the area of chip design service companies, much like Cadence Spectrum Services is pioneering today. Such companies will provide the necessary impedance match between system houses and silicon manufacturers.