On Wednesday May 16, 2012, Warren East, CEO of ARM Ltd. (Nasdaq: ARMHY; London: ARM), gave the opening keynote address at the Semico Research Corp. Impact Conference: The IP Ecosystem. East addressed the issue of intellectual property evolution and growth. Looking forward, he said, there has to be more collaboration in the IP world, both horizontally and vertically.
IP companies need to work closely with chip vendors. Semiconductor companies want to hold onto what they see as differentiators. But this may work against lowering development costs.
In the last 20 years ARM has enabled wireless mobility. The fabless model has lowered costs and spawned the growth of many companies. IP has value. ARM's East cited Semico's projection of $3 billion in projected IP revenue in 2012, a 25 percent growth rate. There are more than 100 blocks per chip.
There are increasing demands on chip design. Today the chip is the system. The board complexity has moved onto the chip. Designers have to balance power with performance. There are optimized processing units designed for specific tasks.
Chip vendors are dealing with 50 percent re-spin rates on complex system-on-chip (SoC) designs at leading nodes. This in turn makes it hard to hit market windows. The development costs continue to grow. For a new SoC design at 14nm the cost has reached $200 million, more than half of which is software. East points out that clearly these costs are not sustainable. However, we have seen these trends before and the industry always finds a way to reinvent itself.
Horizontal IP integration involves the different functions working together on the same die -- CPU, radio, system IP, graphics, video, audio, etc. Standards are important for reducing costs. East noted that 70 percent of SoC designs use AMBA, ARM's on-chip system architecture.
Vertical integration involves the processor, system IP, physical IP, and software. There are chip vendors that are looking for differentiation, but this can be counterproductive. East said that physical IP development cost increases with each new advanced node, but some chip vendors insist on doing their own development rather than rely on IP vendors. He presented a case study of a customer, Panasonic Semiconductor. The company licensed ARM Processor Optimization Pack (POP) and was able to reduce time to market by 40 percent. According to East, differentiating products does not matter if the market moves on. Production-ready physical IP helps.
In vertical integration every element is critical from applications to transistors. Collaboration extends to software. East talked about Linaro, the open-source software for ARM SoCs. It is an organization that consolidates and optimizes open-source Linux software and tools. Like AMBA, it is a standard that reduces complexity.
East pointed out that the new bar is system-driven design. This will require horizontal and vertical collaboration of all parties in the IP ecosystem with the system vendors. The ARM CEO urged the attendees to take the system view in order to reduce costs across the chip ecosystem.