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Technology Stocks : LSI Corporation

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To: getgo234 who wrote (9563)2/8/1998 6:19:00 AM
From: shane forbes  Read Replies (1) of 25814
 
getgo: more stuff stolen from the FT article

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And the difficulties involved with SOC design

But designing and manufacturing a system-on-a-chip is one of the most
challenging projects facing semiconductor companies. The reason is that
combining different functions on to the same chip requires sophisticated
software design tools that can also simulate the operation of the finished chip.


Manufacturing such chips also requires the latest and most expensive chip
manufacturing equipment and then there is the testing of the chip, a huge
challenge in itself.

On top of this, there are the marketing challenges, explains chip design
consultant Ron Collett, president of Collett International. "Producing a
system-on-a-chip is extremely complex, expensive, time-consuming - and
risky. You need to identify a market and a product that can be produced in
very high volumes to make it work. And it is exceedingly difficult to determine
what will be a high-selling product two years into the future.
"

(wow! Could not have said it any better if I tried to! In a couple of sentence the very essence of the problem! And don't we know it! But also note that ramping up volumes takes time and all LSI's current design wins should be going gangbusters in a year to 18 months.)

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As discussed here earlier the problem is crappy design tools

There has been a design gap for some time," points out senior analyst Bryan
Lewis, head of Dataquest's Asic research program. "Companies would be
able to design system-on-a-chip products with much higher numbers of
transistors if they had the design tools available
."

But creating a system-on-a-chip from an IP library is not as easy at it seems,
warns Wilf Corrigan, chairman of LSI Logic, one of the most successful
system-on a-chip companies. Speaking at the IP Forum conference in Japan,
last October, Mr Corrigan said that LSI has consistently underestimated the
complexity of system-on-a-chip designs despite its extensive experience in this
market. He estimates that high-end designs have taken five times more
engineering man-hours than first estimates.

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Long run potential

Even though there are significant challenges ahead, system-on-a-chip products
are being produced that push the boundaries of current technology and will
result in lower prices for a wide range of consumer electronics devices ranging
from wireless communications devices to entertainment systems and PC-type
devices.

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