ALL: monday ny times article on changes in the semiconductor industry, proprietary vs (relatively) non-proprietary designs. comments from anyone in the know?
May 26, 1997
More Complex Superchips Put Premium on Designs
By ANDREW POLLACK
TOKYO -- Iready Corp. represents a new breed of Silicon Valley semiconductor company -- it does not sell silicon chips. Rather, the San Jose, Calif., start-up is licensing the design of its "Internet tuner" integrated circuit to others to incorporate into their chips.
"Chipless" chip companies like Iready are springing up like wildflowers, heralds of broad changes sweeping through the $130 billion global semiconductor industry as a result of the development of new superchips.
In the past, the manufacturer of an electronic gadget like a cellular phone, compact disk player or computer, would buy dozens of different chips from various vendors and wire them together on one or more circuit boards.
But so many transistors can now be crammed onto a sliver of silicon the size of a postage stamp that it has become possible to combine what once would have been separate chips into one superchip.
A circuit like Iready's, which enables electronic appliances to connect to the Internet, might once have been the basis of a stand-alone chip but is now best used as one piece of a superchip.
An example of a superchip is the one just announced in Tokyo by LSI Logic Corp. that contains a microprocessor, as well as an image compressor and processor and most other circuits needed for a digital still camera. It contains 1.5 million transistors with structures so thin that 300 of them placed side by side would be only as thick as a strand of hair.
In one sense, these systems-on-a-chip represent a continuation of trends. For three decades, the semiconductor industry has been doubling the number of transistors on a chip every 18 months, allowing electronic gadgets to become smaller and cheaper yet more powerful. The camera chip, by integrating several once-separate chips into one, allows quicker picture taking and extends battery life.
But the complexity of chips has become so great that it is altering the entire business.
"This will force a paradigm shift in the way the industry works," said Alberto Sangiovanni-Vincentelli, a chip design expert at the University of California at Berkeley.
If the components of a cellular phone, modem or other gadget are on a single chip, the supplier of that chip is practically the manufacturer of the whole product. Chip companies become more like systems companies, overlapping with their customers and potentially capturing a greater share of the profits of the final product.
But chip companies will also have to work more closely with systems companies to gain the expertise they need. LSI Logic, for instance, worked on its camera chip with Minolta, which will be the first camera maker to use it.
Microprocessors and memory and other chips with huge sales will become mere parts of larger chips. That will force processor and memory companies, which now occupy separate realms, into competition with one another for control of the superchip.
"You cannot expect memory to be a major part of the semiconductor industry anymore," said Susumu Kohyama, deputy head of the semiconductor group at Toshiba Corp.
Chip design will also change. Instead of designing from scratch, pre-designed modules will be combined into one superchip, just as numerous chips are now combined on a circuit board.
The modules -- known in the industry as cores, virtual components or intellectual property -- exist not as silicon but as designs stored in a computer. They are mixed and matched in a computer, and when the overall design is ready, the chip is manufactured.
The virtual components will probably come from different companies because no one company would be able to excel at all necessary designs. And the modules could be re-used, saving designers from having to reinvent the wheel.
Driving this change is the fact that chips are simply becoming too complex to design from scratch. Indeed, experts say that chip design, not the physical inability to shrink the size of transistors, is becoming a bottleneck to the progress of the electronics industry. Engineers are having trouble making good use of the millions of transistors available to them.
Last year, the Virtual Socket Interface Alliance was formed to develop standards for mixing and matching virtual components.
"We thought the industry's growth would be stunted if we didn't do something to overcome these design complexities," said Douglas Fairbairn, president of the group, which has 126 member companies.
Re-use of cores is already saving time and money within companies. Motorola Inc., for instance, reduced the time it took to design certain chips from 16 weeks to one week.
Exchanges between companies are rarer. NEC Corp. and Texas Instruments are thought to be jointly contributing to a chip to be used in disk drives sold by Quantum Corp.
Sales of systems on a chip, also known as system LSI (large-scale integration), more than doubled in 1996 to $2.2 billion from 1995 and should soar to $15.8 billion in 2000, according to Dataquest, a market research firm in San Jose, Calif.
Companies are scrambling to define their roles in the new world. The big semiconductor manufacturers all want to make superchips. But if these chips are made of blocks designed by other companies, then the manufacturer will be a low-margin foundry. The key to profits is to have one's intellectual property form the core of the superchip.
Texas Instruments, which has made a big business of selling digital signal processors, is using its processors as the core of more complex chips it customizes for clients. Such a chip set is in the new 56 kilobit-per-second modem made by U.S. Robotics Corp.
Japanese companies are trying to combine memory and microprocessors on the same chip, which could lead to faster computers by speeding the flow of data between memory and processor.
Japanese companies hope this approach will lead to their resurgence in the industry because American companies generally excel in microprocessors but not memory, while Korean companies are strong in memory but not processors.
Japanese chip makers are not as strong in microprocessors and some other specialized chips as American companies. That is why some Japanese companies, particularly Fujitsu Ltd. and Toshiba, are among the most enthusiastic backers of the Virtual Socket Interface Alliance. If modules can be easily transferred among companies, they will be able to obtain the designs they need to build superchips.
By contrast, some of the big American companies that are strong in intellectual property, like LSI Logic or Intel Corp., are not eager to join.
Wilfred Corrigan, chief executive of LSI Logic, said the "have-nots of the world" are mistaken if they think the alliance will solve their problems. "How anyone could think that they will sign up for something and that then hundreds of millions of dollars of I.P. will be handed to them -- it's so naive."
LSI, based in Milpitas, Calif., does get some cores from other companies but designs most itself, including all those in the camera chip. Exchanging cores between companies is not trivial, Corrigan said. "It's like Toyota saying, 'Why don't we throw some GM transmissions in there.' The whole line will grind to a halt."
Nevertheless, a whole cottage industry of companies has arisen to provide intellectual property without making chips. A leading example is Advanced RISC Machines, a British company that has developed a microprocessor core.
There are now an estimated 80 to 100 such intellectual property providers, said Ryo Koyama, president of Iready and chairman of Rapid, a trade group for such companies. Virtual Chip, a new technical magazine covering the intellectual property industry, has also appeared.
The advent of "chipless" companies means "the barriers to entry to getting into the semiconductor business have fallen down to sea level," said Ronald Collett, a consultant on chip design in Santa Clara, Calif. Chipless companies require even less investment than the "fabless" companies that began appearing a decade ago, which design and sell complete chips but contract out the fabrication to others.
Still, Dataquest estimates the independent intellectual property industry has almost imperceptible sales of $68 million. And many of these tiny companies, like some music groups, might have only one or two hit designs before they fade away.
Combining components to make a complex chip is devilishly difficult. Memory and processors, for instance, are different in structure and cannot easily be made on the same chip.
Not only must the building blocks work together logically, but also in terms of voltage, timing delays and other electrical characteristics.
Institutional barriers could also topple the effort to set industry standards. Some companies are afraid their intellectual property might be stolen if they participate. Proud engineers like to design their own circuits rather than use prefabricated ones.
Still, some experts say modular design is a must.
"If the virtual socket interface does not succeed," said Shigeru Fujii, a Fujitsu executive, "the system LSI business will not grow." |
