Cadence's focus -- systems, low power, enterprise verification, mixed signal and advanced nodes

I recently had the opportunity of meeting up with Nimish Modi, Senior Vice President, Research and Development, Front-End Group, Cadence Design Systems, along with Rahul Arya, Marketing Director, Cadence Design Systems (I) Pvt. Ltd.

Modi provided a perspective on how solutions from the EDA sector help the electronic design industry improve productivity, predictability and reliability of design processes, especially verification. Design verification is the process of ensuring that a chip design meets its specifications.

According to him, today's product development ecosystem comprises of three driving forces -- productivity, predictability and reliability. "We are clearly at the core of product development. We have a very strong breadth and depth. There is a layer of solutions we have integrated with our product offerings," he added.

He highlighted that Cadence's solutions consist of integrated point tools, as well as recommended use models. It also has a very strong services offering.

Focus on five key areas
Currently, Cadence is focusing on five key areas -- systems, low power, enterprise verification, mixed signal and advanced nodes. "We have a solutions oriented approach across the board," Modi said.

On systems, it is key to focus on gaining more productivity. Modi said: "This can be done by raising the level of abstraction. The technologies available to address ESL have been around for a while, each one addressing a piece of the puzzle. The need is there for seeing tremendous improvements in that. Here, Cadence's C-to-Silicon Compiler comes in."

"The other piece is -- it has incremental synthesis capabilities. A third thing -- it is connected to the downstream flow. This is the foundation of our systems strategy," said Modi.

Coming to the systems design and verification strategy, the first component involves planning and management. "We have an enterprise manager," he added. Cadence has been a leader in the hardware assisted verification with rich VIP/SpeedBridge portfolio. It has enabled a move to TLM driven design and verification flow. Cadence also delivers unique system power exploration, estimation and optimization flow. It provides unique hardware/software co-verification capabilities (Incisive Software eXtensions) as well.

Low power strategy
On Cadence's low power strategy, Modi highlighted three components -- implementation, verification and design. "The innovation was the ability to create a power format to capture the design intent. We are committed to providing flow operability as well. We want customers to make use of advanced power management techniques," he added.

"We have the superior low power technology," he claimed, referring to the Power Forward Initiative (PFI). "Look at technology -- that is proven. The format is a means to the end. We are also working on providing more capabilities in the power exploration space. We are working under different aspects.

"You can do power analysis on the IP block; there's C-to-Slicon, which has power as a function; multi-supply voltage will be a component of our synthesis solution. All of these vectors are driving the power exploration space. Seventy percent of chips' power is determined at or before the RTL stage," said Modi.

Cadence has a closed loop verification methodology. At each stage, you can go back and make sure you can be consistent with what's there upfront.

Enterprise verification strategy
On enterprise verification, Cadence's approach is plan-to-closure. Predictability -- utilize executable plans and metrics that predict functional closure; productivity -- effectively deploy methodolgy driven multispecialist flows. with VIP and multiproduct automation; and quality -- reduce risk of functional bugs at tape-out at various project stages.

Modi added: "Our verification IP portfolio is also very critical. The depth of our portfolio is the broadest in the industry. In verfication, the actual TAM is growing. We are getting opportunities as well. Multi dimensions of enterprise verification are being taken care of by us."

Interesting that all EDA companies have focused on verification! Why now and why not earlier? Modi said: "We've been in this area for a while. We have pioneered the new approaches. The goal is: how do you know it is good enough to hit the tapeout button? Our goal is to raise the confidence of customers."

He added: "We are coming uo with a hybrid model. We are engaging with customers at this point of time. We came up with multi-language support in OVM. We have 30+ verification IP portfolios."

Trends in complex SoCs
Today, it is largely a mixed signal world. Mixed signal IC revenue has been increasing faster than the rest of the industry. It is driven by applications, including wireless devices, consumer and DTV, and automotive.

Modi said: "There is a genuine need to support natively analog behavioral models in a digital centric verification environment. Mixed signal is a larger percentagre of area and effort."

Coming down to advanced nodes, it is no surprise that Cadence definitely supports MCMM (multicorner and multimode). "It is part of our Encounter Digital Implementation System," added Modi.

Xilinx rolls out ISE Design Suite 11 for targeted design platforms!

Xilinx has now started shipping its ISE Design Suite 11.1!Source: Xilinx

This is said to be the industry's first FPGA design solution with fully interoperable domain-specific design flows and user-specific configurations for logic, digital signal processing (DSP), embedded processing, and system-level design.

The ISE Design Suite 11.1 release is a major milestone in the delivery of targeted design platforms with simpler, smarter design methodologies for creating FPGA-based system-on-chip solutions targeting a wide variety of markets and applications.

Tom Feist, Senior Marketing Director, Xilinx Inc., said that the company has been driving the evolution of FPGA design with domain-specific development environment for targeted design platforms. The new ISE Design Suite 11.1 sets the industry standard for delivering FPGA design tools and intellectual property (IP) to embedded, DSP and logic designers.

"This is a series of announcements that Xilinx is working on. We are releasing the IC Design Suite 11, for now," he added. "Target design platform is a focus for Xilinx right now. We are working with Vita Consortium -- Vita 57." This is the FPGA I/O Mezzanine Card (FMC) standard, which aims to bring modularity to FPGA designs.

Meeting diverse requirements of FPGA design teams
Tailored for domain-specific methodologies, Xilinx's ISE Design Suite 11 has four configurations aligned to user-specific methodologies -- logic (VHDL/Verilog), embedded, DSP, or system design. It has the FLEXnet license management to better meet the design teams' needs.

It also delivers methodologies specific to each designer's needs. Each configuration delivers domain specific tools and IP, and accelerates designer productivity. The Suite narrows the focus to design differentiation, and not the design flow. Besides, it leverages the robust ecosystem of third party partners.

"The goal is to build a strong foundation with the targeted deisgn platform. Each edition of the Design Suite includes all of the tools/IPs needed to create, validate and implement," Feist added.

"We are introducing four different versions -- one for the logic designers; one for the embedded designers, one for the DSP desgners; and for system integrators," he said.

"The overall strategy is to increase designers' productivity. To drive this to the next level, we look at the development phase of our customers. FPGA design teams face different requirements. We need to provide methodologies that are working for each one of the individuals," Feist added. The goal being -- for each new tool, provide the IP and help validate the design.

More turns/day for designers
Overall, there are improvements for all designers, leading to more turns per day. There are improvements in the place-and-route algorithms. It delivers an average of 2X faster runtimes. The second generation SmartGuide provides an additional 2X improvement. The Design Suite also supports multi-threaded place and route.

Other improvements include: XST delivers an average of 2X faster synthesis runtime; improved support for SecureIP provides faster simulation PowerPC, MGT, and PCI hard IP blocks -- supports Mentor, Cadence and Synopsys simulators; 10 percent better dynamic power via place and route optimizations; and reduction of memory requirements by an average 28 of percent.

Feist clarified: "The 2X improvement in implementation is compared to 10.1, our previous release. The 2X improvement related to SmarGuide is relative to a full re-implementation. Also, the 10 percent better dynamic power via place-and-route optimizations is against the previous release."

The Xilinx ISE Design Suite has been positioned as a key enabler for targeted design platforms. It delivers optimized tool flows for each member of the design team. Thereby, it aims to boosts user productivity, improve quality of results, accelerate time to production, and enable designers to focus on differentiation.

Who would be the main users -- power or mainstream? Feist said: "This will be useful for power users as well. Even the pushbutton users will still need to do pin layout. We have tried to make this very intuitive. You can look at the different levels."

Big changes in probe card supplier shares due to 2008 IC market turmoil

SANTA CLARA, USA: VLSI Research Inc. has reported that the global economic downturn has had a seriously detrimental impact on the market for probe cards used for testing IC wafers during 2008, and that 2009 sales will be down even further.

Probe card revenues declined by 26.9 percent in 2008 compared to a 4.2 percent decline in IC sales. This weakness was driven largely by sharp cutbacks within the Memory sector. In 2009, sales of probe cards, including spares and service, are forecast to decline a further 24.5 percent to only US$0.77B, down from US$1.0B in 2008. This compares to nearly US$1.4B in revenues in 2007.

The 2008 probe card supplier ranking saw a number of changes, as those that rely heavily on the Memory market suffered declines. FormFactor (USA), Micronics Japan Co. (MJC - Japan), and JEM (Japan) maintained their lead at the top of the supplier ranking, while SV Probe (USA) climbed into the 4th position, up from 5th in 2007. Technoprobe (Italy) jumped to 5th place from 7th last year.

Over the coming five years probe card revenues are not expected to recover to the levels previously forecast, reflecting the lower level of IC production over this period. Additionally, the very high historic growth rate in demand for memory test probe cards is expected to remain subdued. VLSI Research projects that the probe card market will reach $1.5B by 2013.

Source: VLSI Research

More mature PV industry likely post solar downturn: iSuppli

Recently, iSuppli came out with a study on whether the current solar downturn will lead to a more mature photovoltaic industry! According to iSuppli, severe downturn in the global PV market in 2009 could actually have a more positive outcome for the global solar industry, yielding a more mature and orderly supply chain when growth returns.

Worldwide installations of PV systems will decline to 3.5 Gigawatts (GW) in 2009, down 32 percent from 5.2GW in 2008. With the average price per solar watt declining by 12 percent in 2009, global revenue generated by PV system installations will plunge by 40.2 percent to $18.2 billion, down from $30.5 billion in 2008.

"For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants," said Dr. Henning Wicht, senior director and principal analyst for iSuppli.

"An ever-rising flood of market participants attempted to capitalize on this growth, all hoping to claim a 10 percent share of market revenue by throwing more production capacity into the market. This overproduction situation, along with a decline in demand, will lead to the sharp, unprecedented fall in PV industry revenue in 2009," he added.

What about new entrants?
I quizzed Dr. Wicht how this downturn would lead to a more mature PV industry and what about the new entrants?

Dr. Wicht said: "We expect that the solar industry will invest more softly. The years 2007/2008 were special. Each of the hundreds of suppliers were ready to invest to reach 10 percent market share. This is not likely to repeat." Interesting! "Also, the new entrants will invest more modestly and closely linked to fixed customer orders," he added.

Role of FIs in solar
Are financial institutions paying that much importance to solar, especially in places such as India? This is an issue that was also raised and discussed at the recently held SEMI India solar/PV paper launch.

According to Dr. Wicht, the financial investors are definitely looking into solar, mainly in Europe and US. "PV in India is still at the very beginning. From my experience, there is not yet much attention of financial investors for PV in India," he noted.

Off-grid or grid connected apps?
Turning the discussion to off-grid vs. grid connected applications, I sought Dr. Wicht's advice on the route that should be followed. Again, this topic was discussed during the SEMI India meet early this month. Hence, the interest for India in this field is significant!

Dr. Wicht highlighted: "Installations for the off-grid remains a small portion in terms of the sold modules (MW), about 5 percent. The off-grid system selling might be a good way to start in places such as India. For cell and module production, on-grid is where the volumes are needed." Hope the Indian solar photovoltaics industry takes note of this valuable advice -- and it holds good for other regions as well.

I also asked him regarding a good low carbon growth strategy for developing countries. Dr. Wicht said that depending on the place, it could be a combination of wind, solar and biomass.

Compensating for Spanish whiplash!
According to iSuppli's study, the single event most responsible for the PV market slowdown in 2009 was a sharp decline in expected PV installations in Spain. Also, beyond Spain, the PV market is being adversely impacted by the credit crunch.

Therefore, why won't attractive investment conditions in other some countries compensate for the Spanish whiplash?

Dr. Wicht said: "The investigated countries start from a low level of installations and show long, administrative procedures, limits of feed-in tarifs and reduced capital access. They simply cannot compensate the 2.6GW of Spain in 2008."

Finally, what is likely to happen after the shakeout or fall in the coming years? He added: "System demand will grow stronger from H2-2010, absorbing the inventory, which has been built up in 2009 and 2010. From 2011, demand for modules will rise. It might pick up quickly. Then, companies, which are able to supply on short notice/(flexibility) can gain market share."

Let me see if I can convince Dr. Wicht to visit India and share his insights with the Indian solar/PV industry. Last, but not the least, thanks Jon!

Reports of memory market recovery greatly exaggerated: iSuppli

EL SEGUNDO, USA: Concerned about their image as they face the specter of bankruptcy, many memory chip suppliers are attempting to paint a more optimistic picture of the business by talking up a potential market recovery.

However, while overall memory chip prices are expected to stabilize during the remaining quarters of 2009, iSuppli Corp. believes a true recovery in demand and profitability is not imminent.

After a 14.3 percent sequential decline in global revenue in the first quarter DRAM and NAND flash, the market for these products will grow throughout the rest of the year. Combined DRAM and NAND revenue will rise by 3.6 percent in the second quarter, and surge by 21.9 percent and 17.5 percent in the third and fourth quarters respectively.

“While this growth may spur some optimism among memory suppliers, the oversupply situation will continue to be acute,” said Nam Hyung Kim, director and chief analyst for memory ICs and storage at iSuppli.

“For example shipments of DRAM in the equivalent of the 1Gbit density will exceeded demand by an average of 14 percent during the first three quarters of 2009. This will prevent a strong price recovery, which will be required to achieve profitability for most memory suppliers.”

Painful oversupply
Due to a long-lasting glut of DRAM, the imbalance between supply and demand is too great for this market to recover to profitability any time soon.

“Even if all of the Taiwanese DRAM suppliers idled all their fabs, which equates to 25 percent of global DRAM megabit production, the market would remain in a state of oversupply,” Kim said. “This illustrates that the current oversupply is much more severe than many suppliers believe—or hope.”

Besides cutting capacity, which suppliers have already been doing, they presently have few options other than waiting for a fundamental demand recovery. iSuppli believes that another round of production cuts will take place in the second quarter, which will positively impact suppliers’ balance sheets late this year or early in 2010 at the earliest.

DRAM prices now amount to only one-third-level of Taiwanese suppliers’ cash costs. Unless prices increase by more than 200 percent, cash losses will persist for these Taiwanese suppliers.

While average megabit pricing for DRAM will rise during every quarter of 2009, it will not be even remotely enough to allow suppliers to generate profits in this industry. The industry needs a dramatic price recovery of a few hundred percentage points to make any kind of impact.

iSuppli is maintaining its “negative” rating of near-term market conditions for DRAM suppliers.

Confusing picture in NAND
The picture is a little more complicated in the NAND flash memory market.

Pricing for NAND since January has been better than iSuppli had expected. However, iSuppli believes this doesn’t signal a real market recovery.

Most NAND flash makers are continuing to lose money. The leading supplier, Samsung Electronics Co. Ltd., seems to be enjoying the current NAND price rally as prices have almost reached the company’s break-even costs. However, all the other NAND suppliers still are losing money.

“While the NAND market in the past has been able to achieve strong growth and solid pricing solely based on orders from Apple Computer Inc. for its popular iPod and iPhone products, this situation is not likely to recur in the future,” Kim said. “Even if Apple’s order surge, and it books most of Samsung’s capacity, it would require a commensurate increase in demand to other suppliers to generate a fundamental recovery in demand.”

However, iSuppli has not detected any substantial increase in orders from Apple to other suppliers. Furthermore, Apple’s orders, according to press reports, are not sufficient to positively impact the market as a whole.

It doesn’t make sense for major NAND suppliers Toshiba Corp. and Hynix Semiconductor Inc. to further decrease their production if there is a real fundamental market recovery. This means supply will continue to exceed demand and pricing will not rise enough to allow the NAND market as a whole to achieve profitability.

The NAND flash market is in a better situation than DRAM at least. However, the market remains challenging because fundamental demand conditions in the consumer electronics market have not improved due to the global recession.

One of the reasons why the price rally occurred is that inventory levels have been reduced in the channel and re-stocking activity has been progressing. Overall, memory suppliers will begin to announce their earnings shortly and iSuppli will remain cautious about the NAND flash market until we detect solid evidence, not just speculation, of a recovery.

iSuppli is remaining cautious about the near term rating of NAND market, holding its negative view for now, before considering upgrading it to neutral.

“Production cuts undoubtedly will have a positive impact on the market in the future. However, it’s too early for to celebrate. iSuppli believes the surge in optimism is premature. Supplier must be rational and watch the current market conditions carefully to avoid jumping to conclusions too quickly,” Kim concluded.

Welcome to PC's Telecom Blog!

Welcome to PC's Telecom Blog (http://pctelecoms.blogspot.com)!

Hi friends, I've been thinking about adding a telecom blog to my network for a very long time! The reason being, I started my career in electronics and telecom back in 1989.

I had the privilege of being part of Asian Sources Telecom Products -- a site, which I managed and built, with the help of my team and colleagues at Asian Sources Media, and later, Global Sources. Later, I moved on to Wireless Week, USA, as Asia Pacific Editor for the Asian Edition.

Back in India, I managed Convergence Plus for a short while, before launching four sites for CIOL in 2004 -- Mobility, Networking, Storage and Security.

Given this background in telecommunications, it is apt for me to start a blog on this subject as well. Telecom has been my forte, and well, it is a subject that has also won me four awards in technology journalism, while at Global Sources.

Again, this blog has been spun out off my award winning blog! That blog remains unchanged, and will continue to carry top-quality, world class content!

This blogs will now include specific blog posts related to telecommunications, as well as press releases, industry updates, new products, features, statistics, etc. It will cover wireless, wireline, broadband, networking, optical networking, Test & Measurement, etc.

Thanks for your kind support as always. Suggestions for improvements are always welcome! :)

Semicon recovery likely in H2-09 after sharp recession: Future Horizons

This is what I've received and heard a few minutes ago! If it does happen, as stated, there can't be any better news than this for the global semiconductor industry!

According to Malcolm Penn, chairman, founder and CEO of Future Horizons, a recovery is expected in the second half of 2009 after a sharp recession!!

Future Horizons is predicting this recovery in the second half of 2009 in the Annual Semiconductor Report that was released today.

"There have so far been ten chip-market recessions and all but two have resulted in negative industry growth," said Malcolm Penn, Chairman, founder and CEO of Future Horizons. "The year 2009 will mark the industry's 11th recession; a further period on negative growth is inevitable at an estimated minus 28 percent, similar in magnitude to 2001."

He added: "This semiconductor recession is unlike previous recessions and is directly attributable to the worldwide financial problems; it is not a structural problem of the industry itself. This factor will help to mitigate the global recession's impact on the industry. On the other hand, all markets and all regions were impacted quickly and at the same time. This leads us to predict a minus 28 percent negative growth in dollars for the global semiconductor market over 2008."

Future Horizons believes that the industry is in structurally good shape to enter a recession. This should make the 2009 downturn shorter than it might otherwise have been, depending on when the confidence in the global economy stops falling and that is expected to be during 2010.

Today, businesses prefer the 'stop everything/do nothing' approach, resulting in the dramatic fall in Q4 semiconductor demand, but this cannot continue forever. Future Horizons expects a gradual return to 'business as usual' -- whatever the new 'usual' turns out to be -- in Q2 2009, once a degree of confidence returns to the markets.

It is impossible to predict when the recovery will start, but it eventually will and, given the extent and abruptness of the Q4-08 decline, an overshoot is inevitable making the recovery process faster coming, possibly as early as the second half of this year.

I will be in conversation with Malcolm Penn later today, hopefully, and will carry another post on this subject, should that happen. Stay tuned, folks! :)

Microcontrollers unplugged! How to choose an MCU...

Last month, I'd written a post on how MCUs or microcontrollers are shaping the embedded world. Taking this discussion a little further, I got into a conversation with Upendra Patel, CTO, eInfochips, based in Ahmedabad, with the help of my good friend Princy!

MCUs shaping embedded
On being quizzed on how microcontrollers are shaping the embedded world, Patel said that devices are designed by keeping specialized application in mind and not for general purpose usage in the embedded world. As a result, embedded devices need specialized controllers/co-processors, which are designed to execute the typical functionality in real time by offloading work of main processor.

"Microcontroller fits perfectly in this role, which is self-contained and independent in execution and still supplements to the main processor for processing power. MCUs are the integral part of embedded world and depending on the application, they assume the role of a main processor or a co-processor.

Today's MCU possesses rich features like, ADCs, PWM generator, communication ports like I2C, SPI, UART, USB, CAN etc. reducing the gap between Microprocessors but still maintaining their unique identity by only focusing on controlling and not on number crunching (for which micro-processors are more suitable). The MCUs allow the designers to create head room for future expansion, as they take up some load of main processor.

Embedded devices have been penetrated in all markets where real time performance is vital. Micro-controllers have given significant contribution for this penetration. For example: communication market, surveillance market, biometric devices, micro-finance devices, medical instruments, automotive market and robotics.

Rich feature sets
Rich feature set is an imperative in the MCU market. What should one watch out for?

Even though rich feature set is imperative in MCU market, one should watch out on technical front for following features of MCU:
* Functionality coverage.
* Functionality coverage vs. Bill of Material
* Performance in terms of MIPS
* MIPS Vs. power consumption
* Simplicity in design and board layouts
* Standard compliance for low noise emission and temperature control
* robustness and consistency
* pin multiplexing of interfaces

Other non technical point to watch for is price announcements v/s feature set. The announced low price may be for least feature product and once you choose the MCU with all the features, it may be out of budget for the product

While choosing an MCU
Let us study the key factors that influence choice of MCUs today.

According to Patel, customers looks for following factors of MCUs which influence the choice of MCU.

Price: In small applications, MCU price is a main contributor of BOM and reduced price of the same reduces BOM to a large extent in mass production. For example Built-in peripherals - significantly reduce cost and space. Also, prices of IDE licenses may also affect the decision making of customer.

Performance: Cache memory or internal memory size - significantly impacts performance, similarly Memory width and speed

Availability: Availability is one of the main factor which board designers take care of because slight delay in product launch can result in significant market share erosion for customer. Also Availability in industrial and commercial temperature grades and through distribution channels.

Life span: The life span of the MCU depends on number of years a MCU manufacturer determines to continue support for it as a main stream product. More the number of years, higher the chances of selection. It also includes roadmap for future upgrades

Power consumption: This applies to battery operated devices. Lower the power consumption, longer the recharging/replacement time. There is a trade off between speed vs. power consumption

IDE support: These days products have become more sophisticated, while at the same time the life cycle has become shorter. It is very important to have a equally sophisticated IDE to speed up the development cycle and reduce time-to-market.

Technical support: History has shown that excellent products with not up to the mark technical support has never been successful. It is very essential for MCU provider to provide support at design and development stage of product development.

The other important aspect is about the track record of a semiconductor vendor in deliveries and post silicon bugs/issues reported.

Why are low-power MCUs in demand?
Now, it is time to determine the chief reasons for the demand in low-power MCUs.

According to Patel, in today's consumer market of electronics and communications, handheld devices like the mobile phones and PDAs are mostly operated with batteries. The battery life is becoming a major concern for most of the portable devices because they run several different types of applications hence a demand for low power MCUs.

Also, designs are becoming smaller, and the weight and size of power supply/batteries is impacting the MCU choice and power consumption. Another trend is toward fanless designs to reduce noise and cost, and at the same manage thermals in smaller form factors.

For example, the MSP430 from Texas Instruments is an ultra-low-power MCU, which is suitable for devices where power saving is crucial. Those MCUs which has capability to handle data with CPU intervention participate in family of low-power MCUs.

In order to support low power functionality, MCUs support several power down modes for battery consumption. For example,
* Turning off CPU leaving every thing else functional.
* Running only low frequency clock oscillator and the peripherals running on it.
* To individually and automatically turning on and off peripherals when needed thus saving power being consumed by peripheral.

Applications
MSP430 ultra-low power MCU from Texas Instruments: used in wireless, medical and low power industrial applications.
Atmel's ultra-low per MCU: used in Zigbee, security and keyless entry applications which spend significant amount of their time in sleep mode.

8- vs. 16-bit MCUs
Affordable prices are among the reasons that the Asian region is witnessing a migration to 16-bit architectures. Then, why still have 8-bit MCUs?

Patel advised that although 16 bit MCUs are available at low prices in Asian market, the primary reason for selecting 8-bit MCUs are as follows:
* Design simplicity
* Easy up-gradation to 16 or 32 bit architecture
* Cost effectiveness
* Development tools
* Easy to adopt

Finally, let us have a look at eInfochips' roadmap in the embedded domain. Patel said that eInfochips is more focused on RISC based higher end MCU based products in streaming media, industrial, avionics, security and surveillance domains.

"The primary focus is on 32-bit MCUs, but 8- and 16-bit MCUs are used for specific applications like medical, automotive, micro finance handheld devices, health monitors, and home automation functions in the overall product. With more than 250 engineers in eInfochips embedded divisions, we work on most semiconductor vendor's MCUs."

Indian chip industry dead? You've got to be kidding me!

I was recently chatting with a friend at LSI, who asked my opinion on the Indian semiconductor industry. Interestingly, in one of my groups on LinkedIn, a member has started a discussion on 'whether it is ripe for India to get a silicon IC fab'!

Complete contrast -- an industry friend recently narrated an incident where this friend was asked by someone else -- whether the Indian chip industry was dead! Wow!! Someone's got to be kidding!

First, I can't really determine what's the expectation level among people regarding India's semiconductor industry. It seems that the interest is starting to build up, at a very slow pace.

However, folks need to understand that the semiconductor industry is extremely complex. You can't get away by making some sort of statement about this industry! There is much more to semiconductors than someone merely writing a headline -- "recovery is in sight" or "recession hits semicon" or 32nm is a great process node"!

Why aren't more headlines like "overcoming ASIC design productivity roadblocks," or "What lithography tools are doing for the photoresist market" doing the rounds? Or even: "Are designers as conscious of yield as they should be?" If you can spot the difference, you can make some comment on the semicon industry!

Two, the Indian chip industry CANNOT BE DEAD! It never was, never has been and never will be! Most people would find it tough to answer when Texas Instruments first started operations in India! Why did it choose to start so early? Simply because it backed India as a center! Naturally, the Indian semiconductor goes back that early!

Some folks perhaps relate more to the semiconductor industry with the advent of the India Semiconductor Association. The Association is an industry body, fulfilling its need. However, a lot of work has been going on in semiconductors before ISA came into being. I wonder whether folks have really cared to track this industry in India. I do remember when I first starting covering semiconductors in India, in the early 2000s, there were lot of curious glances from others! :)

Coming back to the Indian semiconductor industry, from 'Made for India', it has moved on to 'Made In India'. Isn't that a significant shift?

As for silicon IC wafer fabs in India, or for that matter, any fab in India -- yes, it is still a good time to have one! Perhaps, the last time around, patience seemed to run out! And that's a hard lesson to learn for those looking to invest in fabs -- there is NO quick turnaround time in semiconductors!

Moshe Gavrielov, Xilinx's President and CEO, recently said in EE Times that venture capital would not return to the semiconductor industry, even after this recession. If this does happen, it would be very unfair! Where would all the start-ups go?

Again, this statement brings clarity to the subject of semiconductors -- this is a very complex industry, and definitely unlike IT/ITeS. We in India are so much into services that we fail to see the wood from the trees!

People love to compare China with India. Friends, do visit China or even Taiwan! Try to find out how they went about building their semiconductor industry, and manufacturing and R&D ecosystems. There are several lessons to learn, numerous role models to follow.

I strongly believe India can very well go the same route! We need some good startups in India as well. If and when those happen, please do not expect fast turnaround times. Please believe in India, and believe in its semiconductor industry. It needs your support.

Nearly 60pc of China chip manufacturing goes unused in Q1: iSuppli

EL SEGUNDO, USA: Once the world’s fastest-growing chip-manufacturing region, China hit an all-time low in the first quarter of 2009, with nearly 60 percent of the nation’s semiconductor manufacturing capacity unused, according to iSuppli Corp.

Semiconductor manufacturing capacity utilization in China fell to 43 percent in the first quarter, the lowest level since iSuppli began tracking the market in 2000, and a massive drop from a recent high of 92 percent in the second quarter of 2004. This rock-bottom utilization rate comes as a direct result of low demand spurred by the global economic downturn. However, the utilization plunge indicates that China’s long-nurtured goal of establishing a vibrant domestic semiconductor production industry is in serious jeopardy.

“During the last 10 years, the Chinese government has worked to develop a domestic economy that would provide the nation with economic independence,” said Len Jelinek, director and chief analyst for semiconductor manufacturing at iSuppli. “The establishment of a technologically strong Chinese semiconductor industry was considered an essential element of China’s long-term domestic economic and technological independence. Unfortunately for China, the plan collapsed as global sales dried up before demand generated from internal sources was able to grow to match demand generated from the rest of the world. Once viewed by China’s government as a pillar of growth, semiconductor manufacturing has turned out to be a financial burden.”

China’s investments in capacity and technology in the semiconductor sector have not provided the financial returns that were forecast for investors, Jelinek added. Adding to China’s dilemma is the overestimation of capacity, which was expected to be shuttered in other regions in favor of lower-cost, more efficient Chinese manufacturing.

“With the addition of the current global economic recession, China’s focus has shifted from establishing semiconductor manufacturing independence to restructuring its entire chip industry before it simply collapses.”

China's utilization is expected to rise moderately through the rest of the year, but will remain very low at 54 percent in the fourth quarter of 2009. Over the longer term, utilization will rebound to 84 and 85 percent in 2012 and 2013. However, when utilization recovers to these levels, China's semiconductor industry will look very different from how it has in the past, with the number of competitors in the industry likely to be dramatically reduced due to consolidation.

The figure presents iSuppli’s quarterly and annual estimate and forecast of semiconductor utilization in China.
Looking ahead
What will China’s semiconductor industry look like when utilization recovers?

“Since Chinese semiconductor manufacturers do not possess a technological differentiation from their competitors, they are at a disadvantage, since there is simply far too much of the same kind of capacity in the world chasing after the same opportunities,” Jelinek said.

“This will lead to mergers and consolidations. However, even if suppliers with similar technologies merge, will they create anything but larger companies with bigger cash-flow problems?”

At first glance, such a scenario is most likely what will happen. Nonetheless, there will be one ancillary effect that will significantly impact the landscape of companies in China: The bigger company will be viewed as the most likely survivor.

This perception will transform into reality as customers assure themselves of a strong supply source by aligning with the largest, most cost-effective semiconductor maker. In the end, the smaller company simply will be forced out because it is uncompetitive in technology and price.

No recovery until 2012
With iSuppli not forecasting a recovery for Chinese manufacturers until 2012, it is unlikely that weak companies can survive two years in the face of a negative cash flow.

iSuppli anticipates the first merger in China’s semiconductor industry will be finalized in the second quarter of 2009. This will signal that time is of the essence if a company or a group of companies is going to be able to weather the storm. iSuppli anticipates that by the second half of 2010, a smaller—yet stronger—semiconductor industry will emerge in China.

Global semiconductor market for PMPs likely to decline at -9.1pc CAGR through 2013

The worldwide semiconductor market for portable media players (PMPs) is poised to drop significantly from $7.5 billion in 2008 to $4.6 billion in 2013, representing a negative compound annual growth rate (CAGR) of -9%, according to a new forecast from IDC.

A mature market, the economic slowdown, growing similarity with mobile phones and mobile Internet devices (MIDs), and inevitable cannibalization all contribute to the shrinking semiconductor opportunity in PMPs. Additionally, PMPs will no longer be the largest market for NAND flash memory.

While revenue for most of the semiconductor components will decline in line with the total decline in PMP unit shipments, wireless connectivity semiconductors will exhibit modest growth, driven by the increase in attach rate for FM, WLAN, and Bluetooth radios.

"As PMPs have grown in capabilities, the dividing line has blurred between multimedia phones and MIDs," said Ajit Deosthali, research manager for Short Range Wireless Semiconductors at IDC. "Moving forward, one should expect the semiconductor players to focus on the larger multimedia phones and growing opportunity in MIDs."

IDC's study, Worldwide Portable Media Player Semiconductor 2009–2013 Forecast provides an analysis of the worldwide semiconductor market for PMPs by device type, from 2009 to 2013.

The study also forecasts the semiconductor bill of materials for audio-only and video-capable PMPs, and the PMP NAND flash revenue and shipments by capacity.

Feb. 09 global semicon sales forecast results: Ala Cowan LRA model

This is an addition to the continuing coverage on the global semiconductor industry forecasts in form of a monthly update to the Cowan LRA Model's global semiconductor sales forecast numbers.

Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, has provided the latest numbers the model has "spit out" based upon the recently published (by WSTS) Feb 2009. actual sales number.

Key points:

1. FEB09 actual sales number ($13.456B) came in in excellent agreement with last month's sales forecast estimate (of $13.446B) which represents a plus 0.077 percent delta comparing the Feb09's actual sales result to the model's previous forecast estimate (see below).

This percent delta represents the Cowan LRA model's momentum indicator and is defined as the percent difference between the actual sales for a given month -- in this case February's just released actual global sales of $13.456 billion and the forecasted sales estimate for February, that is, $13.446 billion which was calculated and published last month.

The momentum indicator can be either positive or negative and is a measure of the percent deviation of the actual monthly sales number from its previous month's prediction which is derived from the model's linear regression analysis of the past 25 years of historical monthly global "sales experience."

2. The latest Cowan LRA Model's full year 2009 global sales forecast estimate is $182.084 billion. It is up very slightly compared to last month's 2009 sales forecast estimate of $181.896 billion.

In terms of 2008 to 2009 expected sales growth the year-over-year sales growth estimate is projected to be -26.8 percent, which is identical to the previous month's sales growth forecast number as detailed in the table below (note that quarterly sales forecasts are also presented covering each of the next five quarters along with a sales forecast for next month, namely March 2009).Source: Mike Cowan


NOTE - ALL ITALICIZED NUMBERS ARE FORECASTS.
Sources: WSTS (Actuals) and COWAN LRA MODEL (Forecasts)
NOTE - Jan09 Actual Sales REVISED (SLIGHTLY) UPWARDS TO $13.167B.

2009 DRAM CAPEX decreased by 56 percent: DRAMeXchange

The 2008 DRAM chip price dropped more than 85 percent, while the global DRAM industry has faced more than two years of cyclical downturn, and the consumer demand suddenly froze because of the global financial crisis in 2H08.

In 1Q09, the DDR2 667 MHz 1Gb chip price rebounded to an average of US$ 0.88, which fell between the material cost and cash cost level. Still, the DRAM vendors encountered huge cash outflow pressure. Not only were capacity cut conducted, the process migration schedules were also delayed in the wake of respective sharp CAPEX cuts.

According to the survey of DRAMeXchange, the worldwide DRAM CAPEX of 2009 has been revised down to US$ 5.4 billion, sharply down by 56 percent, in contrast to the US$ 12.2 billion in 2008.

WW DRAM 50nm process migration schedules all deferred one to two quarters
From the roadmaps of DRAM vendors, the adoption schedule of DRAM mass production using the 50 nm process have now been delayed one to two quarters. DRAMeXchange estimates that by the end of 2009, the DDR3 will account for 30 percent of the standard DRAM.

Regarding the new DDR2 and DDR3 process migration, all DRAM vendors still own different types of strategies of density and types. For example, the Korean vendors’ 50 nm process migration schedules of DDR 3 are earlier than DDR2 and the 2 Gb DDR3 mass production schedule is earlier than the 1Gb chip.

As for the US and Japanese vendors, according to their DDR3 roadmap, the 50 nm process will be introduced between 3Q09 and 4Q09, which is later than the Korean vendors, and also firstly with mass production of 2 Gb DDR3. Therefore, in the DDR3 era, the density will mainly be 2 Gb which is a lower cost driver with more stimulating incentive to the market demand of higher density chips. The Taiwanese vendors are under the high cash pressure and are falling behind in the 50 nm process race. They are mainly focused on “pilot production”.

Gross die increases 40-50 percent as 50nm process drives down cost
According to the Moore’s Law, the number of transistors on an integrated circuit doubles every 12 months. After the process shrinking became more difficult in the recent decade, it increased to 24 months. With new process migration, the closer the line distance is the larger gross die number a single wafer gets, meanwhile the cost is lower and the vendors gain more competitiveness.

The average DRAM output increased about 30 percent during the process migration from 70nm to 60nm. With improvements of process design and die shrink in the same generation of process technology, the output can once again increase 20 percent. In the 50nm generation, the output will increase almost 40-50 percent, compared to 60nm process and the number of gross die increases to 1500-1700 per 12 inch wafer with another 30 percent cost down.

Cost of immersion lithography tools major capex of 50nm process migration
The major challenge of 50nm process migration is the lithography technology. The newest immersion lithography equipment is required and the older exposure equipment at the wavelength of 193nm is no longer suitable under 65nm process, due to physical limitations.

Traditional dry lithography uses air as the medium to image through masks. However, immersion lithography uses water as the medium. Immersion lithography puts water between the light source and wafer. The wavelength of light shrinks through water so it is able to project more precise and smaller images on the wafer. This is the invention that enabled the semiconductor process technology to migrate from 65nm to 45nm.

The current major immersion equipment vendors are ASML, Nikon, and Canon. The largest vendor in the market is AMSL, which is now mainly promoting its XT1900Gi, a tool that is capable to go lower than 40nm and is the most accepted model in the industry. Nikon still promotes its NSR-S610C, which was launched in 2007 and is able to go down to 45nm process. Canon launched its FPA-7000AS7 in mid 2008 that supports the process under 45nm.

Intel's margins hurt again by Atom to tune of $1bn

Intel’s misjudgment of the low margins of the Atom in its netbook processor has hurt the company for the second successive quarter, according to the report: “Netbook-Mobile Internet Device Convergence: Strategic Issues and Markets,” recently published by The Information Network (www.theinformationnet.com).

The Information Network had stated on January 7 that Intel misjudged the success of the Netbook and its Atom processor to the tune of about a billion dollars for Q4. Given the low margins announced in its Q1 release, Intel is still bogged down by the Atom.

The Atom used in a Netbook is processed with 45nm feature sizes on 300mm wafers and measures 25sqmm. It is priced at about $29. Intel’s Penryn Core 2 processor is used in Notebooks. It is also processed with 45nm feature sizes on 300mm wafers and measures 107sqmm. It is priced at about $279. There is a price difference of $200 per processor between the Penryn and Atom, but more importantly, a difference of $115,000 per processed 300mm wafer.

“Intel rethought its production schedule in Q1 by allocating capacity for the Atom and for the Penryn, unlike Q4 where the cut back production on the more profitable Penryn,” noted Dr. Robert N. Castellano, president of The Information Network. “We estimate that Intel produced 5 million Atom processors and 50 million Penryns.”

On March 2, Intel and TSMC announced they had reached an agreement to collaborate on technology platform, IP infrastructure, and SoC solutions for the Atom CPU cores. That situation will improve Intel’s margins for Q2 2009.

“While the announcement was slated toward TSMC’s capability to produce Atom cores for Intel’s march into the Mobile Internet Device (MID) market, which is dominated by ARM, it was an opportunity for Intel to wipe production of the Atom off its books. I’d like to think of it as ‘Intel’s Atom Bomb’,” added Dr. Castellano. “It indicates the tech sector is not really that bad off as the numbers suggest, but just a miscalculation on Intel’s part. Indeed, Intel did say that the bottom had been reached in the PC sector.”

I listened to you, dear readers -- presenting separate blogs on semiconductors and solar/PV

Ever since I started writing this blog, I've always managed to maintain my affinity toward semiconductors. Publishing and maintaining a semicon blog, especially out of India, is difficult and extremely challenging, and well, suitably rewarding.

Several readers, well wishers and friends suggested that I also start taking in press releases, besides writing my own content! Their logic -- who else can do it better! Wow... I'm really overwhelmed!

So, as always, I have listened to my friends -- my readers and well wishers -- and bow to their request!

Separate blogs on semicon and solar PV
This is just to inform everyone -- readers, friends and well wishers -- that I've rolled out two separate blogs on semiconductors and solar photovoltaics (solar/PV).

1. PC's Semiconductors Blog

2. PC's Solar Photovoltaics Blog

These blogs have been spun out off this very blog, my award winning blog!

Let me make it clear that Pradeep Chakraborty's Blog -- which only has original content, barring a few odd posts, will remain unchanged in quality and nature! It will continue to carry top-quality, world class content! In fact, I will now have to work doubly hard, as I've to try and keep up with all of those press releases :)

For now, these two new blogs include specific blog posts related to either semiconductors or solar/PV from my award winning blog, and other specific blog posts, as well as press releases, industry updates, statistics, etc. I will also add new product announcements, mergers and acquisitions, etc., as and when those happen -- on to both of these blogs.

I am very grateful to my friends for this wonderful suggestion. As and when I roll out my technology portal, I will be having a readymade platform -- of articles and releases to fall back on, and to grow it even further.

I would have loved to announce a further three additional blogs on FPGAs, embedded design and EDA as well. That may happen at a later date. Oh yes, an extra one on chip design trends.

You know what? I have a tremendous liking for telecom -- a major weakness, as well as electronic components, electronics and photonics. Maybe, blogs on these are also in order, well, hopefully, sometime soon!

Thanks for your kind support, dear friends, readers, well wishers and all of those who simply give me a wealth of advice, as always. Suggestions for improvements are always welcome! You all know where and how to reach me! :)

Rolled out Telecoms Blog
PS: Dated April 25th, 2009 -- My friends, I have rolled out a Telecoms Blog after all! Couldn't resist staying away from an industry, which has played such a big role in my development as a technology writer, journalist and blogger.

I look forward to your warm support, as always.

Rolled out Electronics Blog
Urgent PS: Dated April 26, 2009 -- Friends, I have also rolled out a brand new Electronics Blog! This is the area where I first started off as a technology journalist, and later, bloomed, while I was at Global Sources (2005-2006).

I will also try and include as many products and suppliers from the Greater China region, and help you source quality electronics products.

Thanks and look forward to your support as always. :)

Will solar downturn lead to more mature PV industry?

The severe downturn in the global Photovoltaic (PV) market in 2009 actually could have a positive outcome for the worldwide solar industry, yielding a more mature and orderly supply chain when growth returns, according to iSuppli Corp.

Worldwide installations of PV systems will decline to 3.5 Gigawatts (GW) in 2009, down 32 percent from 5.2GW in 2008. With the average price per solar watt declining by 12 percent in 2009, global revenue generated by PV system installations will plunge by 40.2 percent to $18.2 billion, down from $30.5 billion in 2008.

The figures present iSuppli’s forecasts of global PV installations in terms of gigawatts and revenue.

Fig 1: Global Photovoltaic System Installation Forecast in Megawatts, 2008-2013Source: iSuppli, April 2009

“For years, the PV industry enjoyed vigorous double-digit annual growth in the 40 percent range, spurring a wild-west mentality among market participants,” said Dr. Henning Wicht, senior director and principal analyst for iSuppli. “An ever-rising flood of market participants attempted to capitalize on this growth, all hoping to claim a 10 percent share of market revenue by throwing more production capacity into the market. This overproduction situation, along with a decline in demand, will lead to the sharp, unprecedented fall in PV industry revenue in 2009.”

However, the 2009 PV downturn, like the PC shakeout of the mid 1980s, is likely to change the current market paradigm, cutting down on industry excesses and leading to a more mature market in 2010 and beyond.

Fig 2: Global Revenues Generated by Photovoltaic Installations 2008-2013 in Millions of US DollarsSource: iSuppli, April 2009

“The number of new suppliers entering and competing in the PV supply chain will decelerate and the rate of new capacity additions will slow, bringing a better balance between supply and demand in the future,” Wicht said.

Blame it on Spain
The single event most responsible for the 2009 PV market slowdown was a sharp decline in expected PV installations in Spain. Spain accounted for 50 percent of worldwide installations in 2008. An artificial demand surge had been created in Spain as the time approached when the country’s feed-in-tariff rate was set to drop and a new cap of 500 Megawatts (MW) loomed for projects qualifying for the above-market tariff. This set a well-defined deadline for growth in the Spanish market in 2009 and 2010.

While the Spanish situation is spurring a surge in excess inventory and falling prices for solar cells and systems, this will not stimulate sufficient demand to compensate for the lost sales in 2009. Even new and upgraded incentives for solar installations from nations including the United States and Japan—and attractive investment conditions in France, Italy, the Czech Republic, Greece and other countries—cannot compensate for the Spanish whiplash in 2009.

The Spanish impact will continue into 2010, restraining global revenue growth to 29.2 percent for the year. Beyond Spain, the PV market is being adversely impacted by the credit crunch.

“Power production investors and commercial entities are at least partially dependent upon debt financing,” Wicht noted. “Starting in the first quarter of 2009, many large and medium solar-installation projects went on hold as they awaited a thaw in bank credit flows.”

After the fall
After 2010, the fundamental drivers of PV demand will reassert themselves, bringing a 57.8 percent increase in revenue in 2011 and similar growth rates in 2012 and 2013.

“PV remains attractive because it continues to demonstrate a favorable Return on Investment (RoI),” Wicht said. “Furthermore, government incentives in the form of above-market feed-in-tariffs and tax breaks will remain in place, making the RoI equations viable through 2012. Cost reductions will lead to attractive RoI and payback periods even without governmental help after 2012.”

Furthermore, lower system prices will open up new markets by lowering incentives and subvention costs. The lower the PV system prices are, the lower the incentives will have to be. Developing regions will be big the beneficiaries of these lower prices and thus will grow faster than the global average, Wicht said.

Source: iSuppli, USA

New routing tool likely to cover upcoming MCMM challenges: Hanns Windele, Mentor

This is a continuation of the previous post based on the recent India visit of Hanns Windele, VP Europe and India, Mentor Graphics, where he met key industry figures in a session organized by the India Semiconductor Association. Windele is standing sixth from left, and Poornima Shenoy, president, ISA is standing fifth from right.

Multimode, multicorner tools
Windele mentioned that in every likelihood, another new routing tool would be coming in once the industry enters the 45nm/32nm space. "There is an increasing static timing analysis signoff complexity. The explosive growth in complexity requires multimode and multicorner tools," he said.

Multicorner and multimode (MCMM) and manufacturing variability will drive the next generation place and route technology. Even in the low-growth markets, technical discontinuities create opportunities for market share changes. For instance, 65nm brings along more than 21 corners/modes scenarios; while 90nm has 10 corners, and 130nm only has four corners.

Therefore, another place and route tool will cover the upcoming MCMM problem. Even in low-growth markets, technical discontinuities create opportunities for market share changes.

Companies cannot afford the growing cost of EDA. Even the cost of design is growing exponentially, especially, verification, as well as embedded software development costs. Even the EDA revenue has been a flat 2 percent of the IC revenue. However, productivity has been growing as the number of engineers don't seem to be multiplying in a great way. For example, the transistors produced per electronic engineer has been hearly four-orders of magnitude since 1985.

Showing optimism in recession
Turning to the ongoing recession, which has impacted the semiconductor industry, Windele said that 2009 will be most likely turn out to be the worst recession in the history of the global semiconductor industry.

"It seems to be heading that way. There is also a lot of reason for optimism. I feel that 2009 will be a lot milder than 1985 and 2001," he said. Even the electronics indsutry's growth rates have been slowing, decade by decade as well.

Therefore, with this ongoing global recession, why should we remain optimistic? Simple! A crisis translates into opportunities!!

Betting on India
No prizes for guessing where the most opportunities lie -- India! Significantly, the 'middle class' in urban India becoming a majority. There is likely to be $3 trillion of discretionary spending by 2010. "People who can afford electronic and consumer goods will be growing further," he added.

Windele cited ISA's figures, which says that India's electronics consumption is headed toward $300 billion by 2015. India’s electronic equipment consumption will likely grow at a CAGR of 30 percent through 2015. It was around $28 billion in 2005, and is likely to increase to $127 billion by 2010, and to $363 billion by 2015.

Yet another reason is the growing number of new cell phone subscribers in China and India, which will be 2x larger than the total US subscribers until 2011. Asia is, by far, the most attractive market for new cell phone sales. India will grow fastest, he added.

Downturns compared
Comparing the downturns of the recent years, Windele noted that 2008 and 2009 look different than the other downturns. "There is hardly any inventory left in the industry. One prediction is: as the price upswing comes, prices in the semicon industry will go up very quickly," he noted.

Seeds already being sown for recovery in 2010. Already, the industry has experiecned two years of severe price declines in memory. Further, systems will be re-designed to take advantage of lower bit prices of FLASH and DRAM.

There will be consolidation and reduced investment in semiconductor capacity in 2008 and 2009. Ramp-up of new system designs will likely happen in 2010 during the period of reduced semiconductor supply.

Concluding, he added that Mentor Graphics became the number 1 EDA company in Europe as the company managed the crisis better than some of our competitors.

State of global semicon industry: Hanns Windele, Mentor

During his recent trip to India, Hanns Windele, VP Europe and India, Mentor Graphics, took time off to meet key leaders from the Indian semiconductor industry over a session organized by the India Semiconductor Association (Windele is seen here admiring a memento presented by the ISA). He presented his observations of the global semiconductor industry.

According to him, the electronics industry is having a roller coaster ride today. "In the past, it was the same for everyone. Today, it is different! Those who have niche products are doing better than others. The economic crisis is accelerating the downturn in the semiconductor industry," he added. Windele apprised the audience that the IC unit shipments had fallen 15 percent in Q408 (YoY).

Windele touched upon the various forecasts presented by various analysts (see chart). The common thing has been -- all analysts have forecasted negative growth. The one key stand out has been Future Horizons, which otherwise remains optimistic, but this time forecast a deep negative growth in the industry.

Is the semicon industry really consolidating?
Given the downturn, is the global semiconductor industry really consolidating, as it should? Windele examined some significant revenue and rankings in an attempt to unravel this case. So, do the big keep getting bigger?

As per the semiconductor concentration of revenue, the No. 1 player has had less share in 2007 than in 1972. Applying the same yardstick with the top five companies, they too have had less share in 2007 than they have in 1972! Extending this to the top 10 companies indicated a similar picture!

This goes on to indicate that the global semiconductor industry has actually been "deconsolidating' since the 1960s! Windele said that between 1965-72, 29 companies entered the market and captured share from the big companies.

Each decade seems to bring in more change. Also, new product families bring new opportunities. Consequently, leadership seems to be changing regularly as well. For instance, 2008 brought the first fabless company -- Qualcomm -- into the top 10!

Also, new fab-lite strategies are working as well, with companies such as Texas Instruments (TI), STMicroelectronics, Renesas, and Sony among the top 10 as per the H1-08 list.

Based on these assessments, Windele said that few companies have managed to stay on the top for more than three decades. The top 10 seems to be changing every decade, he added. The global semiconductor industry has definitely NOT been consolidating. The top fabs, however, have definitely been consolidating, but not the fabless! "You need to be with the right product at the right time at the right place, otherwise you'd disappear," he cautioned.

Why hasn't consolidation happened?
It would be interesting to note why the global semiconductor industry hasn't been consolidating (yet)! According to Windele, this could be due to:

* Unlike trends in steel, chemicals and automobiles, etc., the electronics industry achieves a reduction in cost per transistor of about 35 percent per year, every year.
* This change enables totally new applications addressing totally new markets.
* These new applications and markets are driven by innovators that are frequently new entrants into the electronics industry.

Opportunities for change
Once the EDA market stabilizes, would there be opportunities for change? There should be plenty of opportunities!

The place and route market has definitely not been growing. Rather, it has been a flat market over the past several years. Nevertheless, new EDA startups lead each new generation of place and route technology. According to Windele, there will be another new routing tool coming in once the industry enters the 45nm/32nm space.

Part II of this post continues in the next blog post.

Farnell looking to convert 3,500 prospects this year in India!

Now that's what I call aggression!

Last July, I had the pleasure of meeting Ms Harriet Green, CEO, Farnell Electronics, a part of the Premier Farnell group of companies. It is soon going to be a year since the company set up presence in India. Farnell has aggressive plans for India, with the company likely to look at converting at least 3,500 prospects this year.

I met up with Nader Tadros, Commercial Marketing Director APAC, Premier Farnell (see picture here), and Navin Honnavar, marketing manager, Farnell Electronics India Pvt. Ltd to get an update on Farnell.

According to Tadros, Farnell is said to be the number 1 small-order high service multi-channel distributor in the world. "We carry obver 3,500 leading suppliers and 450,000 product stocks globally. We have 36 transactional websites in 23 languages," he added.

Farnell currently has six warehouses -- one in America, and two in Europe and three in Asia -- Sydney, Shanghai and Singapore. In India, it now has nine branch offices, and one contact center and one global tech center (GTC) -- in Bangalore. The GTC provides live chat and board level support, which also translates into global support.

Tadros said that Farnell is aggressively are supporting the EDE (electronic design engineers) community and MRO (maintenance, repair, operatoinal) marketplace. "We have taken particular focus on developing the EDE space, providing support, services and relevant products. We want to make sure the value proposition is mapped on to the EDE needs," he said. Elaborating on the value proposition, he cited an example of x-ray machine manufacturers.

Global business strategy
Farnell has a four-pronged global business strategy. This includes:
* Focusing on global EDE customer segment.
* Increase business via the Web.
* Internationalization
* Continue to develop profitable MRO business.

Tadros believes that the power of the Web is tremendous. "It is very useful for customers to search and transact. Another area is customer demand. They are looking for efficiencies," he added. "An important aspect that can help us is that we are able to understand customers; needs. The data that the web search is able to provide gives us the critical information. If a customer searches for a part, and we track that, we are able to service their needs better."

Hasn't Farnell been affected by the recession? Tadros said: "We are not immune to the recession. The volatlity is higher, and it is also at the customer level." Honnavar added: "Our strategy seems to be working for us. We are maintaining our base in the MRO space. We are still pulling in customer requests and still growing."

So, what else is Farnell doing, besides these activities? Well, it has adopted a multichannel approach for the Asia Pacific region. It has 154 staff in eight call centers, besides being involved in direct and e-marketing. The company has nine local websites -- simplified chinese for China, thai for Thailand, and English for India, Malaysia, Singapore, Hong Kong, Philippines, Australia and New Zealand. Besides, it has 103 field sales engineers in 29 sales offices.

Aggressive plans
I started this post by saying I liked Farnell's aggressive plans. It currently has 2,500 active customers and 9,000 prospects in India alone. The company has a target to reach $25 mn by 2010. It is also a walue added distributor offering products to leading suppliers such as Texas Instruments, Molex, and 3,500 other leading brands.

Touching on Farnell's clients in India, Honnavar said: "We have independent design houses, resellers, R&D centers, educational centers, government organizations (such as BEL, HAL), etc., among our customers. The prospects includes a huge list of people. We have touched the top layers in tier 2 cities -- such as Coimbatore and Ahmedabad. We are looking at converting 3,500 prospects this year."

More focus on components, SMEs
The components industry isn't exactly in the pink of health right now. Giving his views on the electronics and components space, Tadros said: "Customers themselves are not able to anticipate the demand for the next quarter or periods. We are seeing that there is still growth in the EDE space and inquiries are still coming in. During a recession, you have an opportunity to distinguish yourself from competition. There is pressure on teams as they have to continually innovate. Customers require more even support, more technical documentation, and look for faster turnaround times."

Farnell is in a position to help those SMEs who are in the electronics and components spaces. Tadros said that the company can support such SMEs by helping them to build their markets in a timely fashion.

Honnavar added that Farnell is focusing on building a product and purchasing team, sitting out of Singapore and Hong Kong. "Moving forward, you will probably get to see more buying happening in the Asia Pacific region. Going ahead, a lot of sourcing will also be done from India." The company intends to be extremely close to suppliers, especially in the Greater China region.

LCD monitor panel prices rising despite downturn: iSuppli

iSuppli Corp.'s LCD PriceTrak Service recently reported that prices for LCD monitor panels are rising, despite the weak economic situation and cuts in consumer spending. Isn't this quite unusual, and on surface, really spectacular, given the recessionary conditions.

Thanks to my good friend, Jon Cassell, I was able to get into a conversation with Ms. Sweta Dash, director of LCD research at iSuppli. I started by trying to find out the reasons for LCD monitor panel prices to be doing reasonably well in these times.

China's program driving demand
Sweta Dash said panel demand has been strong due to 'China’s rural consumer stimulus program', which increased sales of small-size TVs that uses monitor panels. Also, the panel demand was strong from branded manufacturers due to inventory adjustments.

She added: "Monitor brand manufacturers and retail channel orders mostly stem from the demand for inventory replenishment because they have kept their stockpiles at lower-than-normal levels since the end of 2008. Now, factory demand is strong as they need to buy panels for inventory adjustments."

The figure here presents iSuppli’s estimate of pricing for various sizes of panels for LCD monitors.

In that case, is China's rural customer stimulus program the only major factor behind this rise in prices of LCD monitor panels?

According to Dash, the other factor is the inventory adjustment by brand manufacturers. TV sales in the US were also better than expected due to the very aggressive prices by brand manufacturers.

"Some retailers reported that they could not meet their demand due to low inventories level. Now, they are trying to adjust the inventory level. Besides better than expected demand for TV and monitor panel, severe cut in factory utilization rates (severe cut in panel production) also contributed to the tight supply for the monitor panel and small-size TV panel, which resulted in panel price increase," she noted.

Is there any specific reason behind the retailers placing higher orders during recession? Or is it only due to the very low prices?

Dash clarified that it is mostly inventory adjustments. "In March, the inventory levels for monitors at the brand and channel levels were below three weeks level; and some were at two weeks level, which is considered low for this time of the year. Also, once the panel price starts increasing, buyers try to buy more in order to take advantage of the very low price."

Situation regarding component shortages
There was also a note in iSuppli' report regarding component shortages. I was keen to find out the exact situation with component shortages, and which specific ones!

Dash said that there is tight supply for PCBs and driver ICs. The lead time for PCBs is extending from two to three weeks to four to six weeks; and the lead time for certain driver ICs is extending to about six to eight weeks.

No recovery soon!
Interestingly, iSuppli cannot declare that monitor end-market demand is headed for a sustainable recovery at this point.

Dash added: "In the absence of a strong rebound in end-market demand, rush orders are not likely to be sustained in May with component shortages being resolved by then. And, the forecast for panel demand is most likely to remain conservative at that time. Also, panel prices are still below cost level. Therefore, in spite of the increasing panel demand, suppliers are still losing money. Further, panel suppliers are rushing to increase their utilization rates and production."

Koreans doing better than Taiwanese
Evidently, the Korean suppliers seem to be doing better than the Taiwanese, as of now. What would be the key reasons for this?

According to Dash, the Korean suppliers were able to provide more competitive prices due to weaker Won rates.

She added: "Also, the Korean suppliers have higher generation fabs, and they have more in-house or regional component production, which gives them the cost structure compared to Taiwan suppliers. They also have more internal customers (for example, Samsung LCD's internal customer is Samsung TV and monitor brand).

Year ahead for LCD monitor panels
Finally, how does the year ahead look like for LCD monitor panels?

Monitor panel demand may face some softness after the inventory adjustment in Q209. That is the reason why panel suppliers have to expand their production cautiously.

"Otherwise, it has the danger of pushing the market back to over supply. We still expect real end-user demand to recover in the second half of 2009 especially by Q4-09. If panel manufacturers act cautiously and expand rationally in the first half of 2009, they can see real demand recovery in the second half of 2009," noted Dash.

Opportunities in India's solar/PV landscape: SEMI India

Solar/photovoltaics (PV) holds tremendous potential and promise for India, a fact not hidden from anyone. To further highlight its importance, SEMI India unveiled its first paper on Solar PV in India yesterday afternoon.

More action from Indian government needed
The meet called for more action from the government of India, a more closer industry-government collaboration, as well as the need for financial institutions to pay more attention to the solar/PV segment in India.

The photo here shows from left to right: Dr. Madhusudan V. Atre, President, Applied Materials India; Dr. J. Gururaja, Renewable Energy Action Forum & Executive President, SEMI India; K. Subramanya, CEO, Tata BP Solar; and Sathya Prasad, president, SEMI India.

Touching on the rationale for this SEMI paper on solar/PV's landscape in India, Dr. J. Gururaja, Renewable Energy Action Forum and Executive President, SEMI India, said it was meant to project the solar/PV industry's perspective: where we are and what needs to be done! This is a first account report and will be followed by many other such reports.

He said: "Solar in general, and PV in particular, can address the challenges that we face today. Solar/PV has a special attraction. It converts solar to electricity without involving any moving parts."

He added that although the industry has been looking at the potential, the markets have not been expanding as expected. "We need to see what can be done and achieved. This report is a stock-taking exercise," he pointed out.

Case for solar/PV in India
Sathya Prasad, president of SEMI India, touched upon the case for PV in India. These include:
* The existing power deficit situation in many parts of the country.
* India's brisk economic growth implies rising energy needs.
* Overdependence on coal for electricity generation -- limited coal reserves and CO2 emissions.
* Overdependence on oil and natural gas imports -- it accounts for 7 percent of GDP and consequent energy security concerns.

According to him, India is abundantly endowed with solar radiation. So far, so good!

Key PV opportunities for India
According to SEMI's paper, the key PV opportunities for India lie in off-grid applications and grid-connected PV. The off-grid applications include:
* Basic lighting and electrification of rural homes.
* Irrigation pump sets.
* Power back-up for cellular base station towers -- approximately, there will be 2.9 lakh base station towers by the end of 2009.
* Urban applications -- such as street lighting, etc.

The opportunities in grid-connected PV exist in:
* The current grid connected PV generation capacity is very small.
* Existing power deficit and huge projected future need.
* The cost point of PV has been declining continuously with technology improvements and scale.

Benefits of PV in India
The benefits of PV in India extend well beyond addressing energy needs. For instance, renewable energy technologies create more jobs than any fossil fuel based technologies. It also creates jobs across the value chain -- from R&D to manufacturing, installation and maintenance. Sathya Prasad highlighted MNRE's point that about 100,000 jobs could be created out of PV.

PV also has the capability of transforming lives. About 450 million Indians today manage with kerosene/other fuels for very basic lighting despite its significant health and safety risks. In this context, special mention needs to be made of the Aryavarta Grameen Bank's home electrification program.

Challenges for PV in India
Evidently, a bunch of opportunities are awaiting India in the solar/PV space. However, several challenges need to be overcome as well. These would be:
* Need for closer industry-government co-operation.
* Need for standards.
* Need for collaborative, goals driven R&D.
* Training and human resources development
* Need for financing infrastructure and models.

So, what are the recommendations of this paper on solar/PV landscape in India, and further call to action? These are:
* Need to evolve a common government-industry vision to make India a world leader in PV.
* Develop financing infrastructure and models that will motivate large-scale PV adoption and investments.
* Expand development of PV in off-grid applications.
* Accelerate grid-connected PV generation on a large scale.

Call for low carbon growth strategy
"Low carbon growth path is universal now. To make that happen, there needs to be a political will," advised K. Subramanya, CEO, Tata BP Solar, and chairman SEMI India PV Advisory Committee, while presenting his perspective on the solar/PV industry in India.

There has been little action on part of the government of India. "This needs to be implemented on the ground. We need policy and lifestyle innovation," he added. Subramanya cautioned that, "Too much of analysis will result in paralysis." According to him, separate budgets are required for a low carbon growth strategy. "Solar has tremendous potential. Even its learning curve is brilliant," Subramanya noted.

He added that if the European Union (EU) can make a low carbon journey so smoothly, then why not India? For instance, in Karnataka state alone, the demand is said to be 6700MW and a 10-11 percent peak shortage. We have 20-odd lakh Bhagya Jyoti and Kutir Jyoti units, and around 7,870-odd street lights. If a majority of these can be replaced by solar, it could lead to tremendous savings! This could be at least 57MW for a state like Karnataka. Apparently, all of this would require an investment of Rs. 52 crores and a payback time of two years.

"Why can't we develop a low-carbon growth path for every state in India? Imagine, what it can do for the other states," Subramanya highlighted. "If the power sector does not do well, it will hit the country's GDP!" Quite rightly so!!

Subramanya cited another example of solar water heaters in Karnataka. There are 32 lakh homes, of which about 5 lakh homes have solar water heaters. If more houses were to adopt these, it would result in a saving of 4,000MW of electricity! The Tata BP Solar CEO also called upon financial institutions to have a closer look at solar. Even the tariffs structure for solar/PV in India is not favorable enough.

He also touched upon US President Barack Obama's energy plan and the actions taken, since his coming to power, and drew a parallel with India's national action plan, which includes a solar mssion. This was released last June, but hardly any action has happened on the ground. So, there needs be changes on this front as well.

Four key aspects for solar/PV in India
Dr. Madhusudan V. Atre, president, Applied Materials India and vice chairman SEMI India PV Advisory Committee, highlighted four major aspects while presenting his perspective on the solar/PV industry. These are:
* See the advantage SEMI India brings to India. It can help bring costs down, due to the involvement of the PV Group.
* A point Dr. Atre had highlighted to me about a year back -- that solar/PV is a great way to trigger manufacturing in India. He said that the solar/PV ecosystem will be a very important step in setting up a semiconductor manufacturing ecosystem in the country.
* What wireless did to telecom -- perhaps, solar/PV has a similar aim! It can get rid of transmission lines and actually take power to the people!
* The Indian government-academia-industry would need to work hand-in-hand.

Synopsys on Discovery 2009, VCS2009 and CustomSIM

If you've been following the EDA industry closely, you'd be well aware of three major announcements by Synopsys over the last couple of days. These are:

* Synopsys introduced the Discovery 2009 verification platform, delivering faster, unified verification solutions.
* It unveiled the VCS multicore technology, delivering 2x verification speed-up.
* It introduced the CustomSim Unified Circuit Simulation solution, which addresses custom digital, analog and memory verification challenges.

I met up with Dr. Pradip K. Dutta, Corporate Vice President & Managing Director, Synopsys (India) Pvt Ltd and Manoj Gandhi, vice president and general manager, verification group @ Synopsys, in an attempt to understand how significant these announcements are for verification.

Verification is huge!
According to Manoj Gandhi, at the macro level, design complexities continue to grow. As this grows, one big challenge is verification. The reason is: today's SoC designs and large IC designs, they are being approached like large software projects.

He said: "Verification becomes huge, like software. It is expensive in hardware design. We focus on the verification challenges. We introduced the System Verilog about four to five years ago, and we had also acquired ArchPro. Yesterday, we announced the Discovery 2009, CustomSim and VCS2009."

How can users make use of new CPUs coming out? "We aim to get higher much performance using multicore architecture," he added.

Introducing VCS2009
The VCS2009 is multicore enabled, runs the industry's first low-power verification methodology, and enables fastest mixed-signal simulation with the CustomSIM. Focusing on the VCS2009, Gandhi said: "In verification, there's a design under test and verification. A lot of designs now have multicores. AMD is among the many folks using the VCS2009. Almost every CPU is designed using VCS. It plays a big role in large SoCs."

Design companies have several activities such as test bench, debug, etc. All of these can now be parallelized. "Customer designs can be simulated on multiple threads," Gandhi said. "Also, the applications can also be simulated on different threads, called application level parallelism. We can actually bring about 5-7X improvement in verification with the VCS2009."

According to him, this product is already being used by some large customers. "This is our next phase of performance innovation. The processor roadmap is getting more and more multicore. We have over 200 customers," he added.

The VCS distributes time consuming activities across multiple cores. Gandhi added that each core has a lot of computations. You may do lot of parallel activities with the mobile phones. All activities are now in parallel.

And how about the speed-up from parallel computation with the industry-leading Native Testbench (NTB)? He said: "We were one of the first to introduce all technologies as part of a single compiler. That brought the 5X speed-up. We did all of this in verification, and a test bench core was brought into verification."

The combination of DLP and ALP optimizes VCS performance over multicore CPUs. Design level parallelism (DLP) and application level parallelism (ALP) -- all CPUs can be threaded on different cores.

Low-power verification methodology published
Synopsys has published a book on industry's first low-power verification methodology, along with ARM and Renasas. It is an attempt to bring technology to the mainstream -- how to do low-power verification. There are other 30 companies who participated in this exercise.

On the CPF vs. UPF debate, he said that UPF is a standard where Magma, Mentor, Synopsys, etc. have participated. Cadence has CPF. Users can make use of this book and apply, on top of both UPF and CPF.

Introducing Discovery 2009
According to Synopsys, this solution is doing very well in the market. The company has seen strong technology leadership over the last two to three years. It has also created strong investments.

CustomSIM is a unified circuit simulation solution. "We have a software to silicon verification focus. We are all the way from system level design to RTL, to software verification, etc. Discovery has some technologies as part of that, noted Gandhi.

What has Synopsys done right?
A most interesting point in the EDA industry, I feel, has been the performance of Synopsys, in an otherwise difficult segment over the past year. So, what are the reasons behind this success?

Gandhi added: "Our management are all strong technologists. We have invested tremendously in bringing in strong technology leaders. In India, many companies needed R&D collaborations locally. For us, it was a big win when we invested in Bangalore. We work closely with customers delivering technologies that will address challenges two-three years from now.

Dr. Pradip Dutta elaborated: "Synopsys is very strong in product leadership (PL). The other two key areas are customer intimacy (CI) and operational excellence (OE). You need to be highest in PL. We have been very conservative even during strong times."

That is indeed a marvellous thought! Those who are typically strong in technology, generally go on to develop great intimacy with customers, and all of this starts reflecting on their operations, which are anyway excellent! Here's a message for those who wish to do well in tough times -- strong product leadership, coupled with customer intimacy and well, corresponding operational excellence!

Focus on verification
Now that the focus is quite clearly on verification, how do EVE and the other verification companies stand out? EVE is currently in the emulation space. Gandhi added that EVE competes more wtih Cadence and Mentor. "We work with EVE on many accounts. Verification is all about finding bugs. Emulation has been more cyclical."

According to him, Synopsys is now looking at tackling the next level -- how do you reduce the overall cost? "We will go beyond selling tools. We would look at how to identify issues and saving verification costs." I believe, verification takes up close to 70 percent of an overall design test.

Commenting on the EDA industry in India, both, Dr. Dutta and Gandhi feel it is still buzzing quite well, despite what's been happening in the global context. "We have invested quite a lot. We have a large team here. We continue to collaborate with local institutions here as well," Dr. Dutta added.