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Industry Dialogue Overdue on Third-Party IP Issues

By Walter Ng
Vice President, Design Enablement Alliances
Chartered Semiconductor Manufacturing

The historic problems, which have plagued third-party IP suppliers, have not gone away, nor have they been addressed to any great degree. Primary among these challenges are establishing value for different types of IP and a standard business model to go along with that, creating industry standards around IP quality, and developing a support and maintenance model more closely tuned to customer needs. The situation is not improving, and as a matter of fact, at 32nm, things may be getting even more difficult for third-party IP suppliers.

As companies across the supply chain increase their investments significantly to "stay in the game" at the leading edge, IP suppliers are struggling to keep up. That should come as no surprise, when you look at a fragile industry made up of many very small players and a few mid-size - relatively speaking - companies that hold most of the market share. Investment in leading-edge IP development continues to be one of the industry's biggest challenges. With fewer and fewer companies actually manufacturing silicon today, it may soon become quite daunting to find a manufacturing partner. Some manufacturers are becoming focused solely on internal IP development, while others, who remain committed to being open in working with third parties, may be able to support only a limited number of partners from a focus and bandwidth perspective, as the degree of collaboration required increases significantly.

An industry and its supply chain are only as strong as the weakest link in that supply chain. Each part of the supply chain that forms the semiconductor industry has been under extreme pressure over the last number of years to change: to evolve and become more technically and economically efficient. Semiconductor companies themselves have gone through tremendous change - mostly in the transformation to fab-lite entities. Foundries have been driven to either double-down on a mainstream leading-edge strategy or to drop out of the race and focus on a specific niche area. Significant consolidation in the package and test areas has occurred. EDA companies continue their traditional cycles of reinventing their business models and pulling the customers through. It is the third-party IP suppliers that are falling behind, as the industry has not made the changes necessary to adjust, despite the pressure from customers and efforts from industry organizations like GSA.

Collaborative models such as the Common Platform - a manufacturing and technology alliance between IBM, Chartered and Samsung - are helping reduce the IP suppliers' risk, bringing resources and a philosophy of openness to the equation. We have realized we can achieve more together, even as 'co-competitors,' and the inherent value that many specialized IP suppliers bring to our mutual customers is worth the effort. But such efforts can only mitigate, not remove entirely, the risk for IP suppliers. Increasingly, at the leading edge, ours is not an industry for the faint of heart.

At the leading edge of technology, fabless and fab-lite companies, for the most part, are used to being self-sufficient. They require very little if anything from external third-parties, including IP. They have been conditioned not to expect the availability of third-party IP at the time they migrate to the next node. From an overall industry standpoint, we - and by that I mean the collective "we": customers, foundries, ecosystem partners - would like to accelerate and enlarge the number of companies which adopt leading-edge technologies, but the bottlenecks in the supply chain are formidable barriers for some. The availability of third-party IP is, for some, a bottleneck at the leading edge. As we see more companies move and adopt leading-edge technologies, more are choosing to move towards a self-sufficient model, developing IP internally instead of leveraging third-party IP. This may be an indication that customers have concerns about the long-term viability of the third-party IP industry.

As customer concerns in the third-party IP arena have grown, others in the supply chain have felt a need to try and address the gap. We have observed more design service companies designing and providing IP to customers. Is this where the third-party IP industry is going as it evolves toward a services model? There has also been a noticeable increase from some manufacturers of proprietary foundry IP, which is made available or licensed to end customers. If the third-party IP industry is not going to evolve and find a way to resolve its challenges, others will find a solution - because they must find way a way to service the end customer. Given this, it is open to interpretation whether design services companies and foundries are collaborators with third-party IP suppliers or, dare we even say, competitors. What is clear, though, is there continues to be significant challenges in realizing a healthy, robust third-party IP industry. Until such an ecosystem exists, it strains the overall semiconductor supply chain.

With the number of moving parts and changing roles, there needs to be active dialogue among all the players in order to chart a path forward. GSA - which has done laudable work on IP issues through its various subcommittees - brings us the upcoming IP Conference, being held September 24-25 at the Santa Clara Convention Center in Santa Clara, CA. This conference presents a forum for debate and open exchange of ideas on the issues faced by the IP industry today. Program topics include the importance of utilizing quality IP; who owns the problem of quality, verification, and reliability related to yield; digital versus analog IP validation, and measuring IP effectiveness. The event wraps up with a panel bringing together multiple perspectives on the "Integration of Foundry and IP Suppliers," moderated by Dave Bursky, semiconductor editor at Chip Design Magazine.

Everyone who has a stake in the IP business model - customers, foundries, partners - needs to join the discussion. These challenges are not going away. As 32nm approaches, the issues become even more pronounced. Together, we must address these issues to enable the continued growth of the semiconductor industry.

Learn about the GSA IP Conference.

About the Author

Walter Ng reports to the Senior Vice President of Technology Development and is responsible for identifying, developing and executing customer and partner alliances that advance the adoption of Chartered's solutions for the leading-edge and mainstream technology nodes. Walter has led the company's collaboration with IBM to define the strategy and implementation of the solutions and third-party network for the industry's first common design enablement platform at 90 nanometer (nm) and 65nm while currently driving 45nm and setting strategy for 32nm. Previously, Walter served as senior director of design solutions and was responsible for driving and managing Chartered's relationships with third-party EDA and IP partners. Walter has been in the electronic design and EDA industry for nearly 20 years. Prior to joining Chartered, Walter was Director of Business Development and Asia Pacific Operations with Sequence Design. In this position, he was responsible for establishing, managing and growing Sequence Design's Asia Pacific sales channel and marketing activities in addition to managing the strategic relations program for foundries, EDA and IP partners. From 1994 to 1999, Walter worked with Cadence Design Systems, where he held positions in strategic marketing and numerous roles in applications engineering, consulting services, sales support and marketing. Previously, he has held various senior design and test engineering positions in Raytheon's Equipment Development Labs. Walter holds a B.S. in Electrical Engineering from the University of Massachusetts, Amherst, and an M.B.A from the University of Massachusetts, Boston.