July 09, 2007
Mentor Graphics – A New Strategy for Semiconductor Intellectual Property
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Is there anybody in the controller space of significance?
The big players are Synopsys and Chipidea. Synopsys has offerings for USB, Ethernet, SATA, PCI-Express, WUSB and DDR2. ChipIdea has offerings for USB, Analog, SerDes and DAC. Cadence has PCI-Express. None of these competitors have any middleware, a kernel or software development tools. A lot of companies do one of the standards but there are not many full line IP companies. The competition would be Synopsys.
Does Mentor offer any IP in a different area?
We have some peripheral IP like microcontrollers, AD51 type, UARTS and those kind of IPs.
Is the USB standard continuing to evolve?
Yes! They are looking at doing high speed USB interchip interconnect. Instead of having a USB connection that plugs into a separate board or device, they are developing a standard so that you can use USB to do chip to chip communication on the same board. You would use the USB protocol to transfer data from one chip to another.
You see evolution not just on USB but in Ethernet, storage and so on. Over time things have gotten faster and improved with technology to meet the needs of the consumer. They have all taken on additional capabilities. You can see that our product line has migrated with those. A real good case is the Ethernet product line. You can see where it started out at 1M. Now it is up to 10G. You are seeing the same thing with SATA. It was 1.0 and has gone to 2.6. It will probably go to 3.0. USB continue to migrate. The same with PCI-Express.
So there is job security I SIP?
There is. There has been a lot of contention in IP market. I think that there is a viable market that is starting to mature to where people are learning how to do business both from a supplier and from a consumer standpoint. You are starting to see some other initiatives in the industry whether is VSIA with their QIP score, or the SSA who has done some work to enable the ecosystem better. A lot of customers are realizing that there are only so many hours in the day. You have only so many designers. You have got to be looking at viable solutions to get the job done faster. One of these is buying quality IP and using that IP. Right now there are some trends in the market towards consolidation that will help everyone. Maybe now we will start getting some of these smaller IP providers out of the marketplace that really do not have the infrastructure whether it is in the development and validation of their cores to produce quality IP or if it is in the postsales support, they don’t have the bandwidth and resources to do a good job. It’s the sort of like the used car salesperson. You have some really good dealerships and some really good automakers but some other people who can taint the water. Over time some of those lower end people will either get thrown out of the business or will have to close their doors or they will understand that they will have to
get acquired by somebody who will put some structure and infrastructure behind them to make sure they produce quality IP.
How do you charge for your IP?
Rick: We have various licensing models. Single use license. A term license where they can license the IP for say three years. There’s also an upfront license option. I spent eight years running IP marketing for Synopsys, so I know that as a major IP vendor we are very flexible in providing the license model customers need for their business. A lot of customers have different requirements. Some like a very low upfront fee. Some want to but it out. We have licensing models to satisfy all of that.
What about royalties?
We charge royalties on some very high value IPs such as when you get into some of the PHY IP at the newer technology nodes. But we do not charge a royalty for digital IP. If the customer says we do not want to pay an upfront fee or pay a very discounted licensing fee, we have an option for a royalty. In that case we can provide a share the risk kind of model.
What would the single use USB licensing fee be? Thousands, tens of thousands, hundreds of thousands of dollars?
For the controller it is in the high tens of thousands of dollars, close to $100K. Each of the components is in that range, some a little above and some a little below $100K. The total subsystem, if you add the three components together, is in the hundreds of thousands of dollars.
Bill: It also depends upon technology. Older technology has a different pricing curve than the latest technology node.
Does the embedded systems group target markets outside of the SIP market?
There is a lot of overlap between them. There are some open areas like VoIP where we have not done a lot of things. We are targeting areas where they can really it with their RTOS. We did a study of joint customers between the two divisions. What we saw was in some ways disappointing but in other ways was exciting. We had hundreds of customers on both sides but very few sales on both sides. We see that as a huge opportunity to pull products in either direction, either with our customers on the IP side to get them to use our embedded software products or vice versa. They were selling their product line to a lot of customers that did not pull through silicon IP. We said that is a huge
opportunity to come in and sell a larger solution that works for our customer base.
If you look at any specific market such as USB market, the embedded software guys had a bunch of USB customers and the IP guys had a bunch of customers but there were very few common customers. Our sales process wasn’t working together. Having seen so many customers having problems we saw the opportunity not only to create sales pull but also to create a solution that solves customer problems.
Perhaps you could tell us something about the USB subsystem solution Mentor announced at the end of May.
Rick: Let’s backup and first talk about hardware design trends today. Increasingly complex SoCs have significantly more gates in the tens of millions and more functionality. Chip designs today require multiple processors, multiple clocking domains and multiple IP subsystems on each chip. With this increase in IP subsystems, the embedded software is becoming increasingly important. Since each of these IP subsystems has its own embedded software components, industry certification is also becoming more important. There’s more of it on each chip. For instance, you have a USB subsystem and a PCI-Express subsystem. Each of those has its own industry certification. Keeping up to
speed for all these different standards and participating in working groups for each group is not something that engineering teams are able to do. If you have 3, 4 or 5 different standards on one chip, you are not sending your engineers to all of these working groups, keeping up with each standard. Most engineering teams are using third party IP or relying on companies like Mentor to provide those subsystems for them.
Engineering design teams need to create chips with many different subsystems and naturally focus on the top level subsystem which is the CPU subsystem. Most of these chips have at least one processor on them, like an ARM processor or whatever but a lot of the design team’s focus is on that CPU subsystem. Subordinate subsystems such as USB or PCI-Express, are usually neglected. They are implemented using third party IP and left to the end of the design cycle. Integration issues with these subsystems are mostly hardware-software related where there is no industry standards to address the compatibility of the hardware and the software. What we are doing is creating a solution that
addresses these issues.
Our new strategy of IP subsystems is focused on reducing the total cost of IP. Besides whatever payment is made to the IP supplier there are costs in time and dollars associated with locating the IP, evaluation and modeling of the IP, verifying the IP, and integrating the IP.
Last year we faced integration issues with many of our customers. We lived those integration issues with customers who sometimes spent multiple months integrating software with their semiconductor IP to create each of these subsystems. According to our customers the integration issues were not in the interface between the digital controller and the mixed signal PHY because that is an industry standard interface. The issue that arises is the integration between the USB embedded software and the digital controller. That is brought on because in the past the digital controller was purchased from one vendor and
the embedded software that controlls the controller was purchased from another vendor. The software includes things like the controller driver, the software stack, class drivers and so on.
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-- Jack Horgan, EDACafe.com Contributing Editor.
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