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To: Don Green who wrote (82576)	6/1/2002 8:24:39 PM
From: NightOwl	Respond to of 93625

Hmmmm.... Sounds to me like a market opening for "cost" reducing technologies. <Hoo Hoo> 0\|0

To: Don Green who wrote (82576)	6/2/2002 1:03:52 PM
From: NightOwl	Respond to of 93625

World needs fewer chip suppliers, according to analyst < See Analyst at img.cmpnet.com > By Ron Wilson EE Times May 31, 2002 (11:59 a.m. EST) SANTA CLARA, Calif. - As if a lousy business climate weren't bad enough, there's more to worry about for semiconductor manufacturers. "The simple fact is that we won't be needing so many chip vendors in the future," Dataquest analyst Jim Tully said this week. "Many firms that are now fabless chip houses should seriously consider becoming IP [intellectual-property] vendors instead." As for that next "killer app" the industry is holding its breath for, Tully says forget about it. "We are always asking, 'What will be the next killer application?' " he said. "The truth is there will be no more killer apps. There will just be a growing network of hardware resources onto which increasingly compelling software applications can be loaded." In a presentation, Tully based his less-than-reassuring outlook on a model of the end markets for electronic equipment, the needs of those markets and the rapidly changing technical environment in which all IC vendors-fabless or not-find themselves. "We used to live in an industry that was driven by the personal computer," Tully observed. "We saw that change into an industry driven by the dot-com explosion. Now we are in the post-PC, post-dot-com era." Today, Tully said, systems-on-chip are consumed primarily by wireless handsets and consumer entertainment devices, with networking and storage applications bringing up a distant third. The fact that the sockets are essentially in consumer markets, he said, will cause profound changes. "Consumer markets are fast and fickle," Tully warned. Designs decrease Technical issues are also changing. The increasing integration of SoC products means that fewer and fewer chips are going into a system. And the spiraling cost of a design-both in nonrecurring expenses such as mask costs and in terms of design complexity and risk-are putting SoC design beyond the reach of more and more companies. This has led, Tully claimed, to a decrease in the total number of chip design starts. "Starts peaked in 1997, and we predict that the decline will continue indefinitely." So instead of SoC technology spreading across the industry, Tully painted an industry restructuring-and contracting-around a handful of vendors that could still afford to complete SoC designs. Many of today's fabless companies, he suggested, will continue to serve the industry, but as chipless IP providers rather than as semiconductor vendors. Those that continue to produce silicon will increasingly design standardized platform chips, capable of serving a range of applications via reconfigurable hardware and software, thus spreading the multimillion-dollar cost of a design across a range of applications. * The analyst suggested that the ideal SoC of the future would be a computing and networking platform, capable of adapting to a range of specific applications through reconfigurability. It could, on one side, configure itself for any of a wide range of communications environments and protocols, and on the other side would have sufficient headroom for a long line of enhanced user features. Show me the money Though not a view of the future that beleaguered semiconductor executives were eager to hear, Tully's prognosis correlated with their anecdotal experience. One manager at a wireless SoC startup who wished not to be identified spoke of the increasing difficulty of getting B-round funding. "Last year a lot of companies were able to get a first round. But now they all have designs that are just about done, and they need more money to tape out and produce chips. The money just isn't there unless you can show the VC three or four live customers. "So there's a growing pool of companies almost ready to tape out, but trying to cut spending while they find enough customers to get another round," the manager related. "It's particularly bad in the network processor area, where there are whole designs that may never tape out." * eet.com _________________________ Now frankly, I'd have to say that Tully is looking more like "chicken little" than a chip analyst. Certainly there is a nasty "little" truth underlying his "End of Chips as We Know Them" message: It costs too damn much to make the little boogers and these costs must be offset by ever burgeoning production volumes. And as we all know volume production means fungible, one size fits all commodities. So whoopdie doo, tell us something new. Nevertheless, spinning tired old messages isn't the real sin of this analysis. Indeed, would that it were. <vbg> Unfortunately, this Tully is as clueless as Luskin, and his Why I Wouldn't Touch a Chip Stock idiocy. Neither of them have a clue as to why the semiconductor sector has yet to see the end of its "Golden Age" or why there are so many "vendors" chasing this debt laden rainbow to the very ends of the earth. Personally, ...I suspect that the lack of BA's in this industry has left it woefully deficient in Mom & Pop's qualified to draw a really BIG picture without the aid of numerically configured dots. <g> Which is why I am really disappointed in you DG. Of all people. I would have never expected the Seeker of TRUTH to be caught so unawares by these merchants of decrepitude. <Hoo Hoo> 0\|0