The semiconductor industry is one of the most dynamically changing industries. Change is inevitable and critical for growth, and innovation is its driving force. As manufacturing costs skyrocket and chip development costs go the same route, fewer and fewer markets are large enough to provide sustainable return on investment (ROI). Companies have turned to offshoring, divesting business lines, and reconsolidating to increase market share. Are these encouraging trends for continued innovation? Absolutely not!
Companies large and small must develop new technology and new business models that promote profitable growth and continuous innovation. Established businesses and startups need to differentiate, add value, and think outside the box. They need to look at new models for deploying their intellectual property (IP) without spending millions of dollars on development activities that do not add value or differentiate them.
Technological innovations in FPGAs, IP, and design software have moved programmable devices to the heart of many systems. Today’s FPGAs span wide ranges of cost and performance, making them applicable for high-end applications as well as high-volume, cost-sensitive applications. Expect FPGAs to continue to increase in market share versus ASICs as more applications adopt FPGAs and as more system functionality moves onto FPGAs due to the high development cost of ASICs. As ASIC development costs go up, it’s difficult to justify the development of an ASIC for many market segments, simply because the ROI isn’t there.
Leveraging existing silicon platforms such as FPGAs and structured ASICs enables the deployment of system IP on standard products. Companies can bring their ideas to the market on chips without actually designing those chips. Private-label your chips, then go to market in small to medium volumes with FPGAs and migrate to ASICs only if and when required in very high volume.