October 03, 2005
Catching Up with MIPS
Please note that contributed articles, blog entries, and comments posted on EDACafe.com are the views and opinion of the author and do not necessarily represent the views and opinions of the management and staff of Internet Business Systems and its subsidiary web-sites.
Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by EDACafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!

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?

I don't but our general council does. But seriously, clearly IP is the foundation of our company. We've spent more than half a billion dollars in research and development since the days of John Hennessey. What we have as a foundational asset is over 100 patents issued today and over 100 patents pending around the world. You need to make sure that you not only develop and patent your IP but that you protect it. We've had some issues over the years. Any time we've gotten involved in litigation, we've been successful. Today we don't have any litigation going on. Obviously a hot topic for everybody today is Asia, in particular China. We are focused on making sure that we have a
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?

Today MIPS has a 32 bit architecture and a 64 bit architecture. What I was referencing earlier was that the 4 to 16 bit markets are migrating up into markets that are being served by 32 bit and in some instances 64 bit. A majority of our revenue today and activity today is around the 32 bit architecture and core design. Not to say that 64 bit isn't important. But in today's world it is important in selective applications; like with the game consoles where you have heavy graphic and computational needs, and like data communication - Cisco certainly uses 64 bit in a lot of different places. A lot of these markets, particularly the omnes migrating up, that don't need 64 bits of
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?

Primarily our model on revenue is royalty and then licensing or contract revenue. On the royalty side, as you know, we and technology in general came out of a pretty difficult market in 2002 and 2003. As you remember at the beginning of 2004 most of the markets started to take off, people started bringing more designs to market. There was a pretty good move in the first half of last year that I think carried through into the second half of the year for us on a royalty basis. There was just an increase in units. People weren't bringing new designs to market in 2002 and 2003. They started to do that in 2004 and that was a real driver for us on the royalty side. On the licensing side we came out with a product that we call the 24K. The 24K is a product that is really differentiated from the competition in the fact that it is significantly smaller. You can save anywhere from 50 cents to $1 a chip depending on the implementation. But in any implementation it is significantly faster from a performance basis when optimized for speed. The product's general availability was last March. That naturally helped drive the revenue on the contract side. We also had the 4KE product come out since then which has also been a good contributor. We're working on our next generation product, multithreading, which will be coming out at the end of this year or the beginning of next
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.

Mike: At a top level the importance of debug, trace and visualization to the programmers of one of these devices is astronomically going up. That's because these days designs are so deeply embedded and getting more and more complex that without the visibility into what is happening in the real core it's very difficult to get the thing to work. We made a conscious decision to go after solutions for the end user's programmers that address the debug, trace and visualization phase. We have been working with FS2 for six years now. We knew what their track record was. We realized that they have a world class product in these areas. We are using their tracing solution today. We expect them
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.

« Previous Page 1 | 2 | 3 | 4 | 5  Next Page »

You can find the full EDACafe event calendar here.

To read more news, click here.

-- Jack Horgan, EDACafe.com Contributing Editor.


Review Article Be the first to review this article

ClioSoft at DAC

Featured Video
Senior Electrical Engineer for Allen & Shariff Corporation at Pittsburgh, Pennsylvania
Upcoming Events
2018 FLEX Korea at Room 402/ 403, COEX Seoul Korea (South) - Jun 20 - 21, 2018
INTERSOLAR EUROPE 2018 at Munich Germany - Jun 20 - 22, 2018
DAC 2018 at Moscone Center West San Francisco CA - Jun 24 - 28, 2018
Symposium on Counterfeit Parts and Materials 2018 at College Park Marriott Hotel & Conference Center MD - Jun 26 - 28, 2018
ClioSoft at DAC

Internet Business Systems © 2018 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise