Travelling On The Silicon Road

The latest in the battle for the new high definition DVD standard – Warner to back Blu-ray and HD-DVD format. Warner Bros. Entertainment, till now a key HD-DVD backer among the Hollywood studios announced that it’ll release films on Blu-ray format too.

The recent issue of Business Week has a very well written article giving the synopsis of the struggles in this standard.

The key entities in this format war are:
A. Consumer Electronics
1. Sony has a lot at stake in this standard. It’s a triple gain for them if Blu-ray becomes the industry format:
- Royalties from sale of all the Blu-ray disks sold
- Resurgence in it’s movie biz through DVD sales
- High sales in electronic gear (HDTVs, movie cameras, Blu-ray optical drives and most importantly – it’s new PlayStation game consoles which will include a Blu-ray drive for playing movies

2. Toshiba would like to continue the inflow of royalty payments coming from it’s current DVDs through it’s HD-DVD patents.

3. Others : HDTV and DVD drive makers

B. Media
With Warner supporting Blu-ray format too, the Sony camp has now 5 of 6 film studios. Sony’s safeguards developed to prevent Blu-ray movies from being ripped to a computer’s hard drive strengthened support for it’s format from the studios.

C. PC industry
1. Microsoft, Intel : They stand a lot to gain if PC were to emerge as a hub for digital entertainment. Microsoft has an additional issue – game console war with Sony. While Microsoft had decided to hold down costs by not including a next generation DVD player in the Xbox console (and instead stream HD content from a PC to a console which could be attached to a TV), Sony said that it’ll include Blu-ray in the next PlayStation game console beginning next year. Plus it decided not to use Microsoft’s iHD technology to add interactive features to Blu-ray disks, opting instead for Java based technology. Microsoft says that Blu-rays disks will be more expensive to manufacture; others do not see any big cost difference.
Both Microsoft and Intel back Toshiba’s HD-DVD format.

2. Dell, HP, Apple: They back Blu-ray. Dell and HP sell HDTVs too.
In an attempt to bridge the gap between the two formats, HP has recently urged the other Blu-ray members to support 2 key technologies (currently supported in HD-DVD): Managed Copy (lets users make legitimate copies of their HD movies) and iHD (Microsoft’s techno for interactive features).

There looks to be only 1 winner………

Comments on “UMC’s Hu envisions a new model for foundry business” in Electronic Engineering Times by Ron Wilson

While it’s true that the leading foundries in this age must have the capabilities of an integrated device manufacturer, the transition from foundry to solutions provider is not an altogether new biz model nor is it an entirely different vision for foundry companies.

Quite a few years back, when foundries, especially in Taiwan, realized that low cost was no longer sufficient for their intended growth, they started focusing more on their IP portfolios. Design support also evolved into working on actual design issues and in some cases offering design services.

To cite a few……
TSMC offers IP portfolio, Design Centre Alliance, In house and 3rd party library services and Assembly & Testing services to some extent.
Chartered offers IP Access & Design Access.

Some are transitioning into this model with 3rd party collaboration while some try to develop it in-house. Foundries also hold an additional advantage in addressing DFM issues.

Refering to “ASIC makers piece together their options” – Ron Wilson & Brian Fuller in EE Times

In an ideal world, the various entities i.e. Design company, foundry, EDA vendor, Packaging, Testing etc. will work together with the customer in a free information flow environment (albeit respecting each others IP rights). Bolstered by the information flow, they can provide collectively the customer with an optimal product (good design, good yield) whilst retaining their focus on their individual targets – and their bottom lines.

But, alas, it’s not the world we live in. And hence we see various strategies for surviving in this market - Fujitsu Microelectronics may be alleviating it’s new process risk costs by spreading it across it’s internal customers and LSI Logic by going fabless while sustaining itself on it’s excellent IP portfolio etc. – as cited in the article.

The partnership model between Chartered, IBM and Samsung will be interesting to watch - what with the potential of a customer being able to tape out with any of the 3 partners and then be able to select any of the 3 (not necessarily the same) as the foundry. How many ASIC semiconductor companies i.e. with both design & foundry capabilities, would be willing to go through the ASIC development only to see another company being chosen as the foundry ? ASICs are still taken up for their final revenues based on ASPs and not just the NREs. Or is this leading to supplementing of required know-how while possibly complementing on other skill-sets ??

Comments on “Freescale partners with Indian Design Houses” by K.C Krishnadas in EE Times

This is indeed a strategy leading to multiple mutual benefits i.e. if implemented in the right spirit.

The right IP, the right technology, the optimal design flow, the right timing: neither of these factors can hold on their own in today’s volatile market. The customer wants a solution, not a set of leggo blocks left to him to assemble together.

Most of the design houses have some excellent design talent coupled with great technology, flow and ideas. But the present highly fragmented and transient market makes it very difficult for these design houses to even survive the initial few years before they hit the market and revenues start trickling in. The ruthless market conditions have led to the premature demise of many a promising design houses. With the multinationals tapping on these entities for domain know how and a basic solution using their IPs and the design houses leveraging on the multinationals’ clout (financial and market channels), it can be a win-win situation.

Comments on “Seeing Taiwan as centre of IC world”, an interview of Nicky Lu by Mike Clendinin

IPs fill up the differentiating edge gap in a product leading to higher sales and thus higher revenues. But the broad definition of IP has also changed over the years. What was initially termed as the “winning” block in a chip has now become a generic part. So one needs to keep up innovating to come up with new IPs, new value-addition to the IC.

In the “manufacturing reigns supreme” years, Taiwan had the edge of having the wafer fab, assembly & testing plants as well as multiple design houses in the vicinity. Later when this along with the lower cost was no longer sufficient, foundries started focusing more on their IP portfolios and now on addressing the various issues arising in the design chain, in addition to the manufacturing issues. This has also been a triggered by the need of the “falling of the walls” between the design space and manufacturing space. Forced or not, this is good for the industry especially in the DSM zone.

Given the earlier edge of having in place the basic semiconductor ecosystem, Taiwan can be strongly poised if it can efficiently harness the synergy from it as an integral unit rather than as separate entities.

ASICs started getting complex. Teams got globally dispersed. This was now no longer restricted to the foundries or the chip backend operations but also to the design team. Add to that a customer sitting in another location. To get a synergy across these islands of expertise for a FTSS moved Program Management role to a necessity. A necessity highlighted by the spiraling cost of design re-spins and exacerbated by the fragmented and transient market requirements.

From my experience, here are a few enablers for successful program implementation:
- Pro-active involvement right from the beginning i.e. from RFQ evaluation.
- Clear formulation of the specs mutually agreed and signed by both vendor and client. In this transient market, modifications are inevitable. However time spent in getting the basic set right is worthwhile.
- A well defined program schedule with clear allocation of resources and checklists
and it’s effective implementation. There are many software packages in the market; however keep in mind that a tool is as good as it’s implementation
- Effective communication
In my experience, lack of effective communication has been a major source of delays and issues cropping up in the program. Technical issues and logistic problems may be sorted out with a lesser impact. And it’s not just a language difference. Cultural and personality issues are not insignificant here. Effective documentation, a good rapport, increased presence, periodic meetings & regular updates, conference calls followed up by a written summary are a few enablers here.
- Anticipate and pre-empt issues and effective workarounds/solutions for problems
A good grasp of the complete ASIC supply chain provides an excellent leverage here. A good Program Manager can foresee the implications of decisions taken in a particular program phase, e.g. design on another phase e.g. packaging, on the ASIC program; a fact which may be lost on an engineer sitting in his island of expertise.

One of the potential solutions in addressing the challenges in manufacturing sub 90nm is in greater collaboration. How many of the existing top semiconductor companies can afford to be profitable while keeping their legs in both chip design as well as optimal yield DSM manufacturing ? One needs to focus upon ones’ strengths while leveraging with ones’ partners on others. Partnerships are extending; it’s a need & not just an option.

It makes me reflect on an article posted in Silicon Strategies on 12/27/2004, “15 predictions for IC, equipment biz in 2005 and beyond” which had a compilation of 15 predictions for the IC and chip-equipment industries in 2005 and beyond and listed some foundry marriages.

The sifting is being done……..