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Round-up 2010: Best of semiconductors
Right then, folks! This is my last post for 2010, on my favorite topic – semiconductors. If 2009 was one of the worst, if not, the worst year ever for semiconductors, 2010 seems to be the best year for this industry, what with the analyst community forecasting that the global semicon industry will surpass the $300 billion mark for the first time in its history!
Well, here’s a look at the good, the bad and the ugly, if available for otherwise what has been an excellent year, which is in its last hours, for semiconductors. Presenting a list of posts on semiconductors that mattered in 2010.
Top semiconductor and EDA trends to watch out for in 2010!
Delivering 10X design improvements: Dr. Walden C. Rhines, Mentor Graphics @ VLSID 2010
Future research directions in EDA: Dr. Prith Banerjee @ VLSID 2010 — This was quite an entertaining presentation!
Global semicon industry on rapid recovery curve: Dr. Wally Rhines
Indian semicon industry: Time for paradigm shift! — When will that shift actually happen?
Qualcomm, AMD head top 25 fabless IC suppliers for 2009; Taiwan firms finish strong!
TSMC leads 2009 foundry rankings; GlobalFoundries top challenger!
ISA Vision Summit 2010: Karnataka Semicon Policy 2010 unveiled; great opportunity for India to show we mean business! — So far, the Karnataka semicon policy has flattered to deceive! I’m not surprised, though!
Dongbu HiTek comes India calling! Raises hopes for foundry services!!
Indian electronics and semiconductor industries: Time to answer tough questions and find solutions — Reminds me of the popular song from U2 titled — “I still haven’t found what I’m looking for”!
What should the Indian semicon/electronics industry do now? — Seriously, easy to say, difficult to manage (ESDM)! 😉 Read more…
EDA Tech Forum 2010: Delivering the latest in 10X design improvements
Pravin Madhani, GM, Place and Route Division, Mentor Graphics.
I’ve just returned from Mentor Graphics’ EDA Tech Forum 2010, titled: Delivering the latest in 10X design improvements. The opening keynote by Pravin Madhani, GM, Place and Route Division, Mentor, could have been better — well, Dr. Walden C. Rhines, chairman and CEO, Mentor, had also delivered a similar lecture at this year’s VLSID 2010 conference.
However, the other two keynotes — by Dr. Kota Murali, lead scientist & program manager of nanotech, IBM India, and Manjunath Hebbar, VP & Head – Strategic Services, HCL Technologies Ltd, lived up to their billing.
The photomask industry is between the proverbial hard rock and the hard place. For instance, at 32nm, the mask cost works out to be $2 million today. In his keynote, Madhani said that the manufacturing industry would surely figure out a way to control mask costs.
Even fab costs are pretty high today — estimated at $50 billion in 2010, that is ~10 percent of the annual market. The global fab industry continues to figure out how to decrease costs. While design costs are projected to grow logarithmically, cost per function will continue to decline long after Moore’s Law is obsolete.
So, will we have any use for so many transistors? Down the years, growth in unit volumes has always distinguished the semiconductor industry. The semicon industry has been growing at 13 percent (10-year CAGR), while transistors have grown at 49 percent. These sit very well, as compared to say, computers – 9.3 percent, steel — 5.3 percent, and automobiles — 0.1 percent. The 49 percent transistor growth drives the semicon industry.
Madhani said that the note/netbook market seems to have several years of growth ahead. The Apple iPad has also created a new segment. Cell phone adoption has been in high-growth mode in the emerging markets. Smartphones are changing the video dynamics.
So, will applications require 10K more transistors by 2018? And, do we have the necessary design tools? Well, there will likely be a ~10K increase in transistors over the next eight years, going up to 40 billion transistors by 2018. Therefore, the industry will require tools ready now in order to design for 2018.
Four principal areas will require 10X improvements in design methodologies — system level design, verification, embedded software development, and back-end physical design and test. A 10X increase in the number of transistors will also require 1000X increase in verification.
In summary, reduction in costs per functionality will continue on a predictable learning curve long after Moore’s law is obsolete. The industry will also witness ~10X increase in transistors over the next eight years, leading up to 40 billion transistors by 2018.
What's happening with the global semiconductor industry?
Next, at the Intel Developer Forum in Beijing, China, it outlined plans for a new Atom processor-based SoC. It is codenamed as the Tunnel Creek SoC for IP phones, printers and in-vehicle-infotainment systems for cars. Excellent!
Then, at its 2010 Technology Symposium, TSMC announced that it will skip the 22nm manufacturing process node and move directly to a 20nm technology. In fact, it proposes to enter 20nm risk production in the second half of 2012. Brilliant!
Now, I have a release from Future Horizons that outlines the state of the global semiconductor industry. On the one hand, Future Horizons indicates that semiconductor sales have continued to be very strong. This looks set to continue for the rest of the year, resulting in a 2010 that is massively improved on 2009.
On the other hand, several companies still remain unjustifiably pessimistic and confused about the state of the market. Companies now have an opportunity to dominate the market. Instead they continue to be cautious, undermining their own prospects of making some serious money. Isn’t that confusing for the industry? Or, is it confusing itself?
I also have a report from Accenture titled ‘Flying blind in the semiconductor industry’, which you can read on the PC Semicon Blog.
According to Scott Grant, managing director with Accenture’s Semiconductor Business, the fallout from the global recession, massive fragmenting of the value chain, the rise of a more diverse world economy, and new sales and distribution models have created tough challenges for semiconductor companies when it comes to understanding and predicting demand for their chips and managing their supply chains. This lack of understanding is a dangerous liability in a world characterized by unprecedented volatility and competition.
Oh my, these are clearly mixed signals all over again! Or, is the global semiconductor industry having problems with its ‘place-and-route’ strategies? Just a fiigure of speech!
For one, is the global semicon industry truly flying blind? Scott Grant has given suggestions as to how the challenges can be tackled. He advises semiconductor companies to focus on three priorities: sales force effectiveness, supply chain integration and optimizing their collaborative planning and fulfillment capabilities.
Look, I’m not an expert! There are several questions that need to be asked, and I hope some knowledgeable folks can answer those.
For one, should the global semicon industry continue to revel in ‘inappropriate pessimism’,’ how will it affect its fortunes in the short and long terms? Or, are those strategies, as advised by Accenture, enough to help the industry? Next, why this need to skip process nodes? What happens to those betting on 22nm? Okay, will all of that have some impact on the semiconductor equipment industry in the long term? What’s really happening with the global semiconductor industry?
There is a need to swing back to optimism, folks, as Malcolm Penn of Future Horizons says in his monthly update.
As I’m about to call it a day (or evening or night), comes the news that EDA industry organizations, Accellera and The SPIRIT Consortium, have completed their merger!
Didn’t I tell you at the very beginning that this is turning out to be quite a week in the global semiconductor industry?
The next week promises to be fun, especially in the Indian semiconductor/VLSI/electronics industry! Well, it has to do with microelectronics! You’ll find out soon. 🙂 Keep reading this blog, friends.
Global semicon industry on rapid recovery curve: Dr. Wally Rhines
Dr Walden C. Rhines, chairman and CEO, Mentor Graphics Corp.
Thanks to Mentor’s Raghu Panicker and Veeresh Shetty, I had the pleasure of an exclusive meeting with Dr. Walden (Wally) Rhines, chairman and CEO, Mentor Graphics, post his technical keynote at the recently held VLSID 2010.
We discussed a range of issues, such as the global semiconductor and EDA industries, as well as the Indian industry.
Global semicon industry
According to Dr. Rhines, the global semiconductor industry is currently on a rapid recovery curve. However, that the semiconductor total available market (TAM) would decline in 2009 due to the weakness of H1-09.
He added that the global semiconductor industry’s growth could even be as much as 22 percent during 2010, as also advised by Malcolm Penn of Future Horizons. This number can definitely change, rather than remain so optimistically high, as the year goes by. (Yes, Malcolm’s an optimist!)
Dr. Rhines said, “If you look at the major semiconductor companies, most of them will have an opportunity to grow — after the Q4 results are in.”
On the global EDA industry
So how will all of this contribute to the well being of the global EDA industry?
According to Dr. Rhines, the EDA industry has been a little different. Mentor and Synopsys have probably had more growth and stability. “Mentor could be the only company to grow. Bookings in Q3-09 have grown by 15 percent and revenue by 3 percent. We are perhaps the only major EDA company that has grown,” he said. In the long term, EDA tends to trend with semiconductor R&D. Semiconductor R&D was flat in 2008, down in 2009, and will probably grow in 2010. So, EDA will probably lag in 2010.”
Advise for Indian semicon industry
I also requested Dr. Rhines to advise the Indian semiconductor industry.
He said: “The Indian semiconductor industry needs to look at more of systems and IC design, as well as embedded software development. India should also have more product start-ups. What makes India unique is its talent, education, etc. India is now producing its own electronic design architecture and embedded software, and it also has the systems infrastructure. India can greatly advance what it already does so well.”
Commenting on the industry’s weaknesses, he added that the Indian semiconductor industry needs to increase the infrastructure for its local start-ups. That infrastructure would require things such as VCs and especially, a cultural acceptance of failure. Also, if India does not have the intrinsic semiconductor manufacturing capability, then it needs to stay current on the evolving technologies.
Does India need a fab?
On being asked this question, Dr. Rhines’ reply was immediate: “I don’t think India ever needed a fab! You can easily have closer relationships with other fabs. The highest paying jobs are design and innovation, etc.. The recession has been driving down costs and innovation has been happening. There are big growing markets — in India and Asia.”
Cadence Virtuoso IC6.1.4 design platform comes with several enhancements
Last week, Cadence Design Systems Inc. introduced the Virtuoso IC6.1.4 — with dramatic improvements to the Virtuoso IC design platform — that reduces overall design time and ensures high-quality production ICs.
These enhancements are said to benefit design teams working along the full spectrum of design complexity, from the most advanced-node, cutting-edge designs to more traditional chips.
This release has been extended to work efficiently at advanced nodes down to 28 nanometers and now supports 64-bit processing for improved capacity and performance. The Virtuoso Space-Based Router has been integrated into the Virtuoso Layout Suite cockpit, making it easier to access.
I got into a conversation with Steven Lewis, marketing director, Cadence, to find out more about this release.
Steven Lewis, marketing director, Cadence Design Systems.
Lewis said: “Virtuoso IC61 was first shipped in October, 2006, over three years ago. IC614 is the latest release of this platform. IC61 is based on OpenAccess as a database with a Qt based GUI. Also, in IC61 a common design constraint system is key to design spanning schematics, layout, routing, circuit optimization, and all other Virtuoso applications.”
The IC 614 has a number of significant areas of enhancements. These include:
1) Significant improvements to analog design environment — A number of key enhancements have gone into ADE to make it even easier to use and to improve performance. Areas like: data presentation, multi-testbench support, analysis and signoff quality validation, data sheet generation, simulation results comparisons, and intelligent selection of sensitivity to statistical variations to dramatically reduce the number of simulations needed.
2) Native integration of the Catena interconnect engine — This enables integration of the Cadence Space-based Router into VLS-GXL, including the common design-constraint system, runtime OA database and OA techfile for design rules. In addition, the Wire Editor, which is based on this technology, is available to every VLS XL Layout Designer.
3) Metric-Driven Productivity — IC 6.1.4 is all about productivity, productivity, productivity. Many users of VLS spend six to eight hours a day in front of this cockpit and incremental improvements have a significant cumulative effect. IC 6.1.4 will:
* Reduce the mouse miles that a layout designer sees.
* Reduce the mouse clicks required for an operation.
* Reduce the menu depth for an operation.
And, how will the IC6.1.4 gain capacity, performance and usability boosts to shrink design cycles?
According to Lewis, there are a number of enhancements to frequently used features, like a new Layer Palette, improved Repeat Copy, enhancements to Via Placement, a new Smart Ruler, and PCell Caching. Additionally, there are improvements to the connectivity, constraint-aware editing and verification, and capacity with the 64-bit port. Read more…
Cadence's Lip-Bu Tan on global semicon, EDA and Indian semicon industry
Lip-Bu Tan, president and CEO, Cadence Design Systems Inc.
Here is an Outlook 2010 report on the global semiconductor industry, as well as the EDA industry, and a look at what lies ahead for India.
Lip-Bu Tan, president and CEO, Cadence Design Systems Inc., who was recently in India during the CDNLive event, is of the opinion that the global semiconductor industry is undergoing some significant changes that will further place new demands on the EDA providers.
Semicon industry trends
Speaking on the current trends in the global semiconductor industry, he said: “Semiconductor companies are becoming more focused on their core competencies, and are increasingly collaborating on a global basis. They are prioritizing capital efficiency, and they are looking for help in containing the costs of both hardware and software development.”
With the emphasis on profitability, one trend that will continue to occur is consolidation. Semiconductor companies are consolidating in order to scale existing businesses, to grow by complementing existing product lines and to focus on strategic, differentiated or market-leading areas, and of course, to save costs.
He added: “The trend towards “fab lite” continued in 2009. AMD spun off GlobalFoundries, its Dresden, Germany fabrication facility, and the parent company of GlobalFoundries, based in Abu Dhabi, announced its intention to acquire Chartered Semiconductor. It appears that if this trend continues, there will be fewer integrated device manufacturers (IDMs) and fewer semiconductor manufacturers in the future, as fab costs for advanced processes soar.
“Globalization is another trend that will accelerate as economies become more interdependent. It can aid recovery, given that stimulus packages can be expected to uplift most major economies. Today, the best growth prospects appear to be in the developing countries.
“Success at globalization requires some new thinking. Companies must think “locally” in places they operate, taking advantage of local supply chains, markets, partners, and engineering talent. Cost optimization is a likely consequence of moving some operations offshore, but if it’s the only motivation, companies are likely to be disappointed. It is important that the business strategy drives globalization, not the other way around.
“Beyond consolidation and globalization, as I indicated earlier, collaboration may also continue to pick up speed. The design challenges at 45nm and below will shape the semiconductor ecosystem in 2010 and beyond. Technical challenges include process variability, signal integrity, design for manufacturability, timing closure, analog/mixed-signal circuitry, and low-power design. Solutions will require extensive collaboration between EDA, silicon IP, semiconductor, and foundry companies – no single company can do it all.
Global re-optimization of industry
Quite interesting, that Tan mentioned industry consolidation. Will there be further consolidations within the industry?
According to him, we have seen consolidation within the semiconductor industry in 2009 and it has been global in nature. What is occurring is a kind of global re-optimization of the industry. IC design, manufacturing, test, packaging, and product assembly are taking place in many different parts of the world, with multiple companies and geographically dispersed teams.
“Although, I think, we may see further consolidation in the coming year; beyond that, I can’t speculate on who will participate or when that will happen.”
Semicon industry outlook for 2010!
How is the outlook for 2010 going to shape up now that some signs of recovery have appeared?
Lip-Bu Tan said that according to the Semiconductor Industry Association (SIA), after a decline of over 11 percent in 2009 as compared to 2008, the semiconductor industry is projected to grow by over 10 percent in 2010 and 8.4 percent in 2011.
“While an economic recovery is inevitable, and may already be taking shape, customers still remain cautious in their optimism. They are keeping a tight rein on research and development budgets. This is consistent with what we have seen with other downturns, and we expect the EDA industry recovery to lag a quarter or two behind the semiconductor industry.”
Strong semicon industry recovery likely in 2010!
If all of the industry analysts are to be believed, the semiconductor market recovery has begun! Nearly all of them have been forecasting a recovery in the global semiconductor market as well. Let’s take a look at their predictions.
* According to IC Insights, the top 20 suppliers’ sales show back-to-back 19 percent growth rates! In fact, four of the top 20 — Samsung, Toshiba, Qualcomm, and MediaTek are likely to show sales growth this year!
* As per Databeans, the Americas was the first to post growth for semiconductors from the same quarter a year ago, up 8 percent. Worldwide, Q3 came in down 10 percent from 2008, but up 20 percent sequentially. This puts the market on target with our current prediction of $217 billion, a contraction of 13 percent from 2008. Databeans is also still predicting that the 2010 revenue will be up 17 percent from this year.
* The Semiconductor Industry Association (SIA) is projecting worldwide sales of $219.7 billion for 2009, a decline of 11.6 percent from the $248.6 billion reported in 2008. Forecast projects that sales will grow by 10.2 percent to $242.1 billion in 2010 and by 8.4 percent to $262.3 billion in 2011. Worldwide sales of semiconductors in the quarter ended September 30 were $61.9 billion, an increase of 19.7 percent from the prior quarter when sales were $51.7 billion, it reported.
* According to DRAMeXchange, 3Q09 DRAM revenue increased 40.7 percent to $5,719 million. Samsung, Hynix, Elpida, Micron and Nanya (of Taiwan) make up the top 5 positions.
* Worldwide silicon wafer area shipments increased significantly during the third quarter 2009 when compared to the second quarter 2009 area shipments according to the SEMI Silicon Manufacturers Group (SMG) in its quarterly analysis of the silicon wafer industry. Total silicon wafer area shipments were 1,972 million square inches during the most recent quarter, a 17 percent increase from the 1,686 million square inches shipped during the previous quarter. The new quarterly total area shipments are 13 percent below third quarter 2008 shipments.
* Malcolm Penn, chairman and CEO of Future Horizons says that Q3-09 chip growth has set the stage for 22 percent surge In 2010 vs. 2009! The market rebound started at the end of Q1, with Q2 coming in at 17 percent sequential growth. With Q3 now up a further 20 percent and Q4 market guidance in the 5 percent to 7 percent range, the 2009 market is set to close out at between $220-225 billion.
* Although global semiconductor revenue is set to decline in 2009 for the second consecutive year, quarterly year-over-year growth is expected to finally return to the market in the fourth quarter, signaling the start of the industry recovery, according to iSuppli Corp. As iSuppli previously announced, global semiconductor revenue is set to contract by 16.5 percent in 2009.
* A note of caution from The Information Network, which said that semiconductor equipment billings were at 1994 levels as semis continue to underspend! Much of the problem in its opinion is the transition from 200mm to 300mm diameter wafers. Also, semiconductor companies, let by International Sematech, are pushing for a transition to 450mm wafers, which in our opinion will be the death knell for a large number of equipment manufacturers. It is critical that semiconductor equipment manufacturers boycott 450mm development. The Information Network also indicated that the “salad days” are over for the equipment industry.
* Late September 2009, the EDA Consortium (EDAC) Market Statistics Service (MSS) announced that the EDA industry revenue for Q2 2009 is $1,125.5 million, a 5.6 percent sequential decline from Q1. Since Q3 results are awaited, and as Walden Rhines, EDAC chair and chairman and CEO of Mentor Graphics, said, “As the electronics industry recovers, and its R&D spending increases to come in line with its growing revenue, the EDA industry would be expected to recover as well.”
* According to iSuppli, foundries played the semiconductor survivor in 2010. It reported that although the global semiconductor foundry market is set to make a welcome return to growth in 2010 after a terrible 2009, the recent downturn is likely to thin the ranks of the top-tier pure-play suppliers down to just three major players in the future,
There you have it! All of the semiconductor pundits are pointing toward a recovery in 2010!
However, there are some questions that remain unanswered, for now. iSuppli also reported that there has been no double booking in this semiconductor recovery in late 2009 at least. Will this scenario remain? For how long? Or, will those same old mistakes be made once the industry is back to being healthy?
Will there be renewed interest in the move toward 450mm fabs? What happens to all those companies making equipment for 300mm fabs, should that happen?
Will the companies re-write their business plans, as advised by Future Horizons’ Malcolm Penn?
In all of these good tidings, there is some discomfort hidden deep down!
Oh, one last point! What happens to all of those folks who got laid off during the longest recession of our times? Will they be re-instated?
Mentor's Wally Rhines on global EDA industry and challenges
Walden C. Rhines, chairman and CEO, Mentor Graphics Corp.
Thanks to Veeresh Shetty at Mentor Graphics, I was very fortunate to get into a conversation with Walden (Wally) C. Rhines, chairman and CEO, Mentor Graphics Corp., who was recently on a visit to India for the EDA Tech Forum as keynoter.
Besides discussing the global EDA industry, the challenges it is currently facing, we also discussed industry issues such as whether the lack of EDA tools is a bottleneck for 3-D implementation, EDA in the big picture, with regard to areas such as modelling and photomask correction, and so on.
State of global EDA industry
According to Walden Rhines, 2008 and the first quarter of 2009 are the weakest periods ever reported by the EDA industry.
He said: “A substantial portion of the weakness during this period was caused by a change in revenue recognition accounting by one of the major EDA companies. Before 2008, there had only been two years of negative EDA revenue growth in history and both of those were very minor negatives (i.e., almost zero) and both of those were caused primarily by changes in revenue recognition accounting, one each by each of two major EDA companies.”
While this recession is the most precipitous drop in electronics industry history, the normal pattern of preserving most R&D spending has been maintained by most electronics companies. As a result, the decline in EDA revenue is small when compared to the decline in semiconductor industry revenue.
“As the electronics industry recovers, and its R&D spending once again comes in line with its growing revenue, the EDA industry should recover as well. Positive signs include the strength of the semiconductor sequential revenue growth in Q209 and the fact that the Q109 rate of year to year decline in EDA revenue was nearly half the rate of decline of the fourth quarter of 2008,” he added.
Tech challenges
What would be the biggest technical challenges facing the EDA industry right now? Rhines said that the largest technical challenges for the EDA industry right now are:
1) low power design (from system level through physical layout),
2) keeping up with the growing functional verification challenge (by developing new approaches including ESL, coverage based verification, emulation, intelligent testbench, hardware acceleration of test benches, assertion-based verification, etc.) and
3) dealing with manufacturing variability (through application of design-for-manufacturing techniques to design).
The conversation continues in a while… I’ll be back!
State of the global EDA industry: Dr. Pradip Dutta, Synopsys
A few weeks ago, I was fortunate enough to be able to speak with Dr. Pradip Dutta Corporate Vice President and Managing Director, and Treasurer, regarding the state of the global EDA industry and in India. What followed was a very interesting conversation, some of which is reproduced here!
Any sign of improvements in EDA?
To start with, the state of the global EDA industry is well known, and it has also seen revenue drops Q-on-Q in the past. Are there any signs of improvement?
According to Dr. Dutta, the last several quarters in the semiconductor industry have been extremely challenging as consumer demand for electronic products has declined with the heavy stress on the global economy.
“While we are starting to see signs of the semiconductor industry rebounding off the bottom with inventory replenishment and an uptick in end demand for key consumer items such as PCs and mobile phones, the environment is expected to remain difficult at least well into next year.
“During this time, the challenge for the semiconductor industry and its suppliers will be to find the next level of efficiency. The good news is that across a broad field of applications, semiconductors are a key enabler to future prosperity. Green solutions, low-cost netbooks, advances in connectivity and evolving products like the Kindle are just a few examples of areas that could help drive future development.
“The long-term ramifications of this scenario on the EDA industry are starting to become visible. More than ever, customers want to get their products out on time, and get it right with high quality.
“In addition to some immediate cost-cutting to respond to the crisis, most semiconductor and design businesses are re-focusing their market strategies, streamlining their operations, de-risking their supplier and partner relationships, and in some cases actively pursuing consolidation opportunities to drive economic efficiency.
“This situation presents as an opportunity for EDA companies to focus on important product developments that can enable leading semiconductor design and manufacturing companies to not only create more advanced devices, but to simultaneously lower risks and cut costs. In today’s economy, companies need to find ways to manage expenses while still investing in the future so they don’t just survive the recession, they emerge from it stronger.”
State of the Indian EDA industry
Obviously, it would be interesting to see how is the Indian EDA industry holding up in these times.
Dr. Dutta said that the Indian EDA industry is a combination of catering to global semiconductor players and addressing the needs of a domestic market that is slowly developing. The global players that operate out of India are rapidly moving up the value chain in terms of owning and architecting the next generation chips. This leads to an enormous opportunity for EDA companies to get associated at the front end of tool decisions.
“As you are aware, the level of technology that is being witnessed in the chips that are getting designed here is absolutely bleeding edge. The EDA companies are therefore paying concomitant attention to robust application support and in-house R&D effort. It has to be a full package here and now to address these kinds of customer requirements.
“Beyond the global players, India is seeing a few, but committed fabless design companies coming up in recent times. In addition to that, the Indian government is showing a lot of interest in country-specific programs, primarily in defense areas that require EDA support.
“We have also recently seen media reports about an “India Chip” being conceived at the central government level for domestic security applications. The ISA is working toward a blueprint for targeting semiconductors into a national agenda and hopefully, many ideas for systems and corresponding chips that will emanate from it to keep EDA companies interested,” he added.
Pradeep Chakraborty 