IP's 20 year evolution - adaptation or extinction

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From its infancy 20 years ago, the semiconductor IP industry has evolved into the major driving force of today’s semiconductor landscape. This talk will take a historical view of the changes in the industry over the past twenty years, looking at how the landscape (environment) has changed and how individual companies either adapted or simply went away. What will the IP industry and players in the future look like?

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IP's 20 year evolution - adaptation or extinction

  1. 1. IP’s 20 Year EvolutionAdaptation or Extinction… This presentation contains confidential and privileged material for the sole use of the intended recipient. Any unauthorized review, copying, or distribution of this document by others is strictly prohibited. © Copyright 2011 Infinitedge LLC STRATEGY t PERSPECTIVE t EXECUTION
  2. 2. Evolution Evolution is any change across successive generations in the heritable characteristics of Semiconductor IP populations. Adaptation in Semiconductor IP is a trait with a current functional role in the life history of a company that is maintained and evolved by means of natural selection. Definitions Adapted from WikipediaDec 2011 IP / SoC 2011 - Grenoble, France 1
  3. 3. Electronics and IP Over the Ages… Custom Early Enriched Age of Pre-IP “Historic” Age Design Mobility Multimedia Modern IP Age Age AgeGigaFlops iOS LINUX IP SoC Android Sub Tools Systems EDA WirelessMegaFlops Drives Mixed- Multi- EDA Enables signal Design Analog IP Cores IC Design Proprietary Discrete Multi-core Digital IP Drives Tools RF SoC Design Req. IP Industry Fabless Semi FPGA Evolves RTOS DrivesKiloFlops Discrete Innovation ASSP Analog MPU’s ASIC CPU’s 1980 1985 1990 1995 2000 2005 2010 Dec 2011 IP / SoC 2011 - Grenoble, France 2
  4. 4. 1980 – 1990 “Pre-IP Historic”  Dominated by major diversified semiconductor companies  ASIC companies create EDA industry  Programmability drives need for FPGA and fuels memory growth 30.0% Bubble Size Represents Total EV/Revenues 25.0% 1990 SEMICONDUCTOR DESIGN AND IP 20.0% AUTOMOTIVE 15.0% CONSUMER MULTIMEDIA 10.0% COMMS INFRASTRUCTURE ANALOG/RF 5.0% MEMORY PROGRAMMABLE 0.0% (1.0%) (0.5%) 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% DIVERSIFIED SEMICONDUCTOR (5.0%) 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 3
  5. 5. 1990 - 1995 “Custom Design Age”  ASIC companies create “content” leading to early IP companies  FPGA continues to grow  Market rewards targeted providers (automotive, consumer multimedia) 30.0% 1995 Bubble Size Represents Total EV/Revenues 25.0% 24.8% SEMICONDUCTOR DESIGN AND IP 20.0% AUTOMOTIVE 15.0% CONSUMER MULTIMEDIA 10.0% COMMS INFRASTRUCTURE ANALOG/RF 5.0% MEMORY PROGRAMMABLE 0.0% (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% DIVERSIFIED SEMICONDUCTOR (5.0%) 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 4
  6. 6. 1995 – 2000 “Early Mobility Age”  Mobile telephony drives need for communications infrastructure  ARM secures major telephony wins  Internet starts to gain dominance in industry  ESW fueled by increasing demand of IP to complete ecosystem 30.0% Bubble Size Represents Total EV/Revenues 25.0% 2000 SEMICONDUCTOR DESIGN AND IP 20.0% AUTOMOTIVE 15.0% CONSUMER MULTIMEDIA 10.0% COMMS INFRASTRUCTURE ANALOG/RF 5.0% MEMORY PROGRAMMABLE 0.0% (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% DIVERSIFIED SEMICONDUCTOR (5.0%) 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 5
  7. 7. 2000 – 2005 “Enriched Multimedia Age”  Mobile communications and multimedia converge into smart phones and tablets  Convergence of triple play in home (phone, television, computer)  Apple, Google and ARM challenge traditional market leadership 30.0% Bubble Size Represents Total EV/Revenues 25.0% 2005 SEMICONDUCTOR DESIGN AND IP 20.0% AUTOMOTIVE 15.0% CONSUMER MULTIMEDIA 10.0% COMMS INFRASTRUCTURE ANALOG/RF 5.0% MEMORY PROGRAMMABLE 0.0% (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% DIVERSIFIED SEMICONDUCTOR (5.0%) 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 6
  8. 8. 2005 – Present “Age of IP Sub-systems”  Complexity of design drives need for IP and system solutions  IP revenues continue to grow  System value displacing semiconductor value  Premium on integration in the form of digital IP, analog IP and ESW 30.0% Bubble Size Represents Total EV/Revenues 25.0% 2011 SEMICONDUCTOR DESIGN AND IP 20.0% AUTOMOTIVE 15.0% CONSUMER MULTIMEDIA 10.0% COMMS INFRASTRUCTURE ANALOG/RF 5.0% MEMORY PROGRAMMABLE 0.0% (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% DIVERSIFIED SEMICONDUCTOR (5.0%) 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 7
  9. 9. CPU & MCU Evolution Custom Early Enriched Age of Pre-IP “Historic” Age Design Mobility Multimedia Modern IP Age Age Age 68K ARM6 Major MCU Adapt Acorn ARM Emerges Motorola becomes PPC extinct 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 8
  10. 10. EDA (IP Related) Custom Early Enriched Age of Pre-IP “Historic” Age Design Mobility Multimedia Modern IP Age Age Age Logic Modeling Ambit Design Corporation Systems Redwood Design Automation 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 9
  11. 11. Standards Based IP & Libraries Custom Early Enriched Age of Pre-IP “Historic” Age Design Mobility Multimedia Modern IP Age Age Age 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 10
  12. 12. Embedded Software Custom Early Enriched Age of Pre-IP “Historic” Age Design Mobility Multimedia Modern IP Age Age Age Berkeley Real-Time Software Innovations Design 1980 1985 1990 1995 2000 2005 2010Dec 2011 IP / SoC 2011 - Grenoble, France 11
  13. 13. What Does the Future Bring? Mobile Broadband Global Coverage Connectivity Machine-to-Machine Always-on 50 Billion Devices Connected by 2025 !Dec 2011 IP / SoC 2011 - Grenoble, France 12
  14. 14. Connectivity and Enriched Media Driving Growth Wireless Networks 2G Fixed Mobile Convergence GSM CDMA 3G UMTS WCDMA 4G LTE Broadband Driving Growth Broadband Networks Broadband 768Kb Copper Streaming Digital Cable Narrowband Wireless 10Mbps Content Subscribers Satellite Fiber Double play (STB) 1Gb Triple play (APA) Broadband Driving Growth Home Sensor Networks Control Broadband Machine to WPAN Security/Tracking Machine I/F ZIGBEE Narrowband Cellular Subscribers NFC Energy Management RFID Transactions Source: The Dolcera BlogDec 2011 IP / SoC 2011 - Grenoble, France 13
  15. 15. Relative Market Performance Semiconductor IP 80.00% 60.00% 40.00% 20.00% Indexed Prices % Change in 0.00% -20.00% -40.00% -60.00% -80.00% Embedded Software NASDAQ Composite Index (^COMP) - Index Value PHLX Semiconductor Sector Index (^SOX) - Index Value SIP Index IE SIP Index: ARM, Aware, Imagination Technologies, MIPS, MoSys, Rambus, CEVA, WiLan, Silicon Image, MOSAID Semiconductor IP and Embedded Software Consistently Outperform Electronics and Semiconductor MarketsDec 2011 IP / SoC 2011 - Grenoble, France 14
  16. 16. Semiconductor Market Momentum and Growth Semiconductor IP Bubble Size Represents Total EV/Revenues Video Embedded Telecom / Software SEMICONDUCTOR DESIGN AND IP Datacom Market Momentum Wireless AUTOMOTIVE Optical EDA CONSUMER MULTIMEDIA COMMUNICATIONS INFRASTRUCTURE ANALOG/RF MEMORY PROGRAMMABLE Storage Diversified DIVERSIFIED SEMICONDUCTOR Semiconductor Growth (3yr CAGR) Bubble Size = EV/Revenues Source: Infinitedge/CAPIQ Oct 2011 Fastest Growing Segments Focused on IP and Embedded SoftwareDec 2011 IP / SoC 2011 - Grenoble, France 15
  17. 17. Increased Activity in M&A Landscape 6 16 42 57+Dec 2011 IP / SoC 2011 - Grenoble, France 16
  18. 18. Summary Market Drivers  People & Devices – Connected  Enriched Multi-Media Semiconductor Forces for Change  Design Starts continue to decline  Complexity of design drives need for IP and System solutions  IP revenues continue to grow  No longer differentiate with silicon manufacturing  System value displacing semiconductor value  Premium on integration in the form of hardware and software IPDec 2011 IP / SoC 2011 - Grenoble, France 17

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