Big fish will grow bigger, risk taking smaller fish will thrive
It’s Christmas 2021. The semiconductor industry is flooded with income: all fabs run at or above maximum capacity, volumes are in short supply while prices of wafers and ICs are floating up. Electronics are everywhere in our lock-down offices and private homes, and in many other systems and services that all of us use (almost) every day.
Cash is flowing in abundantly in our industry. This cash needs to roll … or else its value is slowly melting away – you know: negative interests and high inflation… There is no better option than to invest… in big(ger), small(er) and new(er) fish. Foundries invest in more capacity, while IC design companies focus faster on new products. New ideas will have more opportunity.
2022 promises a bright semiconductor industry future.
Companies with access to wafer fab output – i.e., the ones that get their wafer orders processed in a timely fashion will benefit the most. “Some fruit company” as a guy named Forrest said, like many other bigger fish, will have no shortage, hence plenty of business. Big fish will grow bigger, likely with less effort than before.
For sure, smaller fish will fight not to be eaten. They will (have to) take risks in an unprecedented way, in these unprecedented times. MPW (multi-project-wafer) access is delayed, sometimes without a clear timeline of availability of the next available seat. Hence prototypes are delayed or cancelled.
Not acting is a (fast) path to oblivion. So, what’s the action the smaller fish can (and shall) take?
We already see that some of the more agile fish skip prototypes (MPWs) and jump to full mask designs. That’s calculated risk taking. Masks are expensive, but in the scheme of things, when this cost is a single digit percentage of the total design cost, it makes sense to act as such.
Still, risk mitigation is a necessary thing to keep doing. Everyone shall aim for first-time-right integrated circuit designs. Using MPWs, risk mitigation came with a $10-$100K level price tag (along with the shuttle cycle time added to time-to-market) – using full masks, that cost goes up 10X.
The eco-system of silicon (product) proven IP has established its value time and again – no need to argue that. Now, the proven IP value increases 10X with MPW’s being skipped, out of necessity, for full mask designs – while IP cost do/should certainly not follow that 10X trend.
So, here’s what the smaller fish can and should do: mitigate risk as much as possible by licensing (more) proven IP. Even doubling the IP cost against a 10X risk increase makes sense. License with those providers with a solid track record – that is obvious. What should also be straightforward: leverage the IP business model of 1/N cost upfront with a shared upside in the future – it’s called recurring royalty, and it’s a further risk mitigating strategy.
And work with design service partners that have a proven track record to mitigate more risk in those blocks where you lack unique skill, experience or labor-power in order to maximize your first-time-right chances.
There is plenty of food in the ocean for you to eat, and not to be eaten… That’s how smaller fish will survive and strive. The path forward, out of the woods and into the sea is clear!
We, at Sofics, hope to meet you again or for the first time in 2022. We wish that the promise of a bright semiconductor future will materialize for you, your projects and your company.
The Sofics team – your trusted supplier of on-chip robustness IP solutions
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