October 03, 2005
Catching Up with MIPS
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What is your sales model?
We have a direct sales force everywhere. We do have a couple of arrangements in Asia. We have representatives that cover markets where there are customers we're not focused on. Predominantly MIPS uses a direct sales force not only in North America but globally.
How is your revenue split geographically?
We don't specifically do a breakout. It's a little hard to trace that because about half of our revenue is royalties. We may get a royalty report from Toshiba for example which would track for us outside of North America but a majority of their product might have gotten shipped into North America. We don't track the geographic split because it is difficult to track it that way. But we certainly have a robust amount of business outside of North America today. Some of the partners that have done business with MIPS the longest like Phillips, Toshiba and NEC are companies outside of North America.
How do you deliver your product?
We deliver it in a few different ways. We can deliver it through keys so that you can download GDSII or RTL and chip documentation from the web. But we don't do anything unusual. We don't have anything physically to deliver. Most of it can be downloaded once we provide a decryption key to unlock it.
Do you have any concerns about protecting that intellectual property?
balanced model there that allows them to be successful with the MIPS IP, be able to treat it as it is treated globally in other countries. We've been careful as to protecting our IP. We always have people with whom we are exchanging letters and thoughts with but we don't have any litigation going on right now.
What's the business split in terms of 24 bit versus 64 bits?
addressing. Data paths are really the places where 64 bits are used today but 32 bit processors or designs are typically adequate in most of our vertical markets today.
Mike: To that let me add one thing. When we do architectural development, we do it for both 32 and 64 bit. Casey is correct in that core designs are predominantly 32 bit. But our architectural licensees who build their own designs do a fair amount of their own 64 bit implementations based on the architecture we do internally.
How do you price your products?
From an architectural standpoint I think I mentioned earlier it's probably $3 million to $5 million. It could be more depending on the rights that you are looking for, field of use etc. On a core basis the cores on the very lowest end can go from several hundred thousand dollars to the high end where they can be several million dollars. When we license a core, we would license it for a single use or maybe two or three uses or in some instances unlimited use. Obviously, the broader usage you get, the higher the cost.
On a royalty basis whether you are a licensee of the architecture or our designs, the royalties tend to be fundamentally the same. That's not to say that depending upon the market or what they're trying to do there's not some flexibility. But most people model around 2% of the ASP of the chip as a royalty, probably from 1.5% to 2.5%. That's true whether it is an architectural license or a core license. Even on the core side there doesn't tend to be a lot of differentiation up and down the product family.
MIPS had a very good fiscal year that ended June 30; 28% revenue growth, $13 million in profit. To what do you attribute this success?
year. I think that the driver over last year or so has been really the 24K family (24K and 24KE). The 24KE is fundamentally the same as the 24K except it has DSP extensions.
Getting back to your recent acquisition, what was the prime motivation for the acquisition of First Silicon Solutions (FS2)?
The prime driver from a business standpoint was to not only to continue to facilitate the time to market advantage that we think we have and people being able to differentiate in their implementations of MIPS through having good programming, debugging and testing tools but also the multithreading that is coming up as well. I'll let Mike get into a little more detail on how it is technically differentiated and perhaps how it differs from what ARM does.
to become more and more important in the future. Their ability to go in and add debug capability to SoCs is extremely good. We expect to be using that also. We have been talking to them about visualization and they have some extremely good ideas that they are implementing. So those three things are the things that really attracted us to FS2 in terms of the value they bring to the end MIPS customers.
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-- Jack Horgan, EDACafe.com Contributing Editor.
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