In the early 1990s, engineers of varying degrees of skill with a powerful PC set up shop designing and selling blocks or libraries of reusable components with a defined interface and behavior. These blocks, known as intellectual property, or IP, were then (and still are) integrated into a larger design.
While the new market segment created excitement and new opportunities, it also was untested and created uncertainty. Many fledgling companies failed. It’s a different story today. Arm, as well as Cadence and Synopsys, are silicon IP suppliers and the segment’s yearly revenue tops $4 billion, a long way from those early garage startup days.
ESD Alliance member CAST, a silicon IP provider since 1993, participated in the remarkable growth and impact on the semiconductor industry. Nikos Zervas, CAST’s CEO, and I discuss those early days of the IP business and what’s ahead.
Smith: What were the early days of silicon IP like?
Zervas: In those early Wild West days of IP, vendors and customers both wanted to benefit from IP, but nothing was standardized, and people just tried things to see if they worked. The perceived barrier to entry was low: hundreds of IP companies sprang up thinking they only needed RTL coding skills and tools, an FPGA to prototype, and a few thousand dollars to invest.
IP deliverables, quality standards, and business practices varied from vendor to vendor and over time. Risk was high, and there are many horror stories of re-spins or market failures due to faulty IP cores.
Smith: How has the silicon IP market changed from its early days?
Zervas: Firms delivering high-quality IP and providing outstanding customer support survived. Others disappeared. Eventually the industry centered around a reasonably common sense of IP requirements and quality and a consistent set of business practices.
IP product complexity has driven upwards as SoCs have grown. The largest ASICs used to approach a few million gates; today they’re hundreds of millions, and the granularity of IP has evolved from small functions to pre-integrated subsystems. Early on, a designer doing image processing might license individual functions like a Finite Impulse Response (FIR) filter or a Discrete Cosine Transfer (DCT) block. Today, instead they would license a complete JPEG compression core containing those functions and more, or even a complete black box subsystem streaming processed, stabilized, compressed video over Ethernet.
IP selection criteria have also changed. Early IP was handcrafted to eliminate every extra gate, as being a few thousand gates smaller was a killer advantage in the era of 180nm ASIC processes. Today, at 7nm or 5nm process, tens of thousands gate differences are just noise, and it’s usually the reliability, functionality, and performance of an IP core that matter most.
Smith: When did the silicon IP market start to take off? What was the driving force?
Zervas: By the early to mid 2000s, uncertainty about what IP was and how best to use it – and the early wave of less-than-great providers – were being replaced by increasing acceptance and emerging best practices.
The introduction of smartphones, the wild growth of Internet of Things applications, growing automotive system sophistication, and other advances fueled the explosion of the IP market in the late 2000s. In fact, according to the ESD Alliance Electronic Design Market Data Report, revenue from IP licensing today has surpassed the license revenue from front-end EDA tools. This would have been unimaginable in the late 1990s.
Smith: How has silicon IP changed chip design?
Zervas: Designers today must develop massive, complex systems with an even tighter time to market. Only the higher level of design abstraction and the distributed expertise that silicon IP provides make this possible.
But IP also increases the challenge of differentiation: With the same IP available to everyone, how do you design a product that stands out in its market?
The answer to differentiation today lies mainly in clever SoC architecture. Delivering better features with superior performance, lower power consumption, or other winning characteristics now depends not so much on perfecting each separate IP block but rather from selecting the best IP for the system’s requirements, integrating those IP cores for clean communication and efficient resource sharing, and other smart system-level decisions. It’s similar to modern building design: Every firm has access to the same materials and tools – concrete, glass, etc. – but only a few produce exceptional buildings.
Smith: It seems that are several different business models for IP licensing, such as up-front license fees, subscriptions, royalties, or a combination of these. Do you think the IP market will gradually align around one basic model, or will it continue as is with a variety?
Zervas: Different models serve different needs. For example, commodity IP like a SPI interface can’t demand royalties, but unique, leading-edge IP – like a 112Gbps SERDES – still can.
I believe the market will continue with different business models, though the number of different models may shrink and their terms begin to align.
About Nikos Zervas
Dr. Nikos Zervas is the chief executive officer of CAST, Inc. He co-founded image and video compression IP developer Alma Technologies in 2001, and led the bootstrapped firm as chairman and CEO for nine years before joining CAST. He was a founding member of the Hellenic Semiconductor Industry Association and served on its board for several years with responsibility for strategic planning. He is a senior IEEE member and member of the Technical Chambers of Greece, had contributed to the GSIA's IP Working Group, and has published multiple technical papers on data compression design and related topics.
Robert (Bob) Smith is executive director of the ESD Alliance, a SEMI Technology Community.
