Semiconductor IP News and Trends Blog

IP Costs Rising – But It May Not Matter

Everyone attributes different reasons for this rise – from quality concerns to integration issues – but the opportunity cost of the alternative would be even higher.

By John Blyler

Semiconductor IP costs are rising. The reasons vary according to one’s point of view. For example, a recent paper by Atrenta attributes cost increases to quality issues. This paper draws from an IBS study to illustrate the upward trends in development cost between IP and ICs (see Figure 1). This relationship makes sense, as the increasing reliance on IP blocks in today’s System-on-Chips (SoCs) solves many problems but creates new ones or at least shifts them to different parts of the development life cycle.

Figure 1: IP development costs as percentage of IC development costs. (courtesy of I.B.S. Inc.)

Quality is one reason for the rising cost of IP. What are the other factors? Consider Gary Smith’s DAC 2011 kick-off presentation concerning Platform Design. Among other things, Gary’s talk stressed the importance of reuse as the major driver in design productivity. His “100 million gate design” example showed that, to meet necessary chip design productivity goals, 90 percent of  design reuse was needed. 

What are the sources of this design reuse?  

Smith notes that a recent GSA reported that 66 percent of IP is internally developed. His own research shows that 18 percent of IP comes from the foundry portfolio library, while 16 percent is licensed from third party IP vendors. (See Figure 2).

Figure 2: IP Sources (coutesey of GarySmithEDA.com)

Chip designers know that internal designs may not be compatible with other sources of IP. This is one reason why integration issues are a concern. In addition, the cost of identifying and fixing bugs – quality issues – increases as more IP is used in the design. And more IP is being used in designs to meet shrinking time-to-market constraints for new products, especially in the commercial space.

A third cost driver is the assembling, configuration control and reusing of IP. This last cost is present even within slight iteration of the same product line. Perhaps this is why companies like IC Manage drew so much attention at last year’s DAC.

Semiconductor IP costs are rising, thanks to quality, integration and management issues. But the alternative choice to design reuse, namely starting from scratch with each design, would be even costlier. Without reuse, designs would seldom meet critical time-to-market windows, which would mean significant losses in revenue. In light of such opportunity costs, the rise in real expenses may well be worth it.