SMTA International Conference Proceedings


Author: Jim Walker
Company: Gartner-Dataquest
Date Published: 9/25/2005   Conference: SMTA International

Abstract: The transistor, the integrated circuit, and now nanotechnology. Today, we are the high-tech world. But, technology is not the only issue that makes a product successful in the fast-changing electronics market. One must concurrently consider the system design, supply chain, end-user application and market demand before a product should be introduced.

Effectively correlating the market dynamics with the technology under both prosperous and receding conditions is the challenge in order to maximize profits and minimize losses. These issues and their relationship to semiconductor manufacturing and packaging is becoming more of a factor, especially as the market becomes more consumer-centric.

Silicon manufacturing advances have reduced the cost of a logic gate. It has reached the point that, for many logic-only designs, the silicon represents a small portion of the total product cost. As a result, the silicon cost advantages offered by application-specific integrated circuits (ASICs) are losing importance. ASIC vendors are reevaluating their strategies.

A portion of the ASIC industry is moving toward system-on-a-chip (SOC) solutions. This is the market segment that gets all of the headlines; yet there remains a sizable amount of revenue for what can be considered commodity ASICs - those without an embedded processor, memory or multiple "megagates" of logic. According to ASIC designers, nearly 50% of gate array ASIC designs still contained fewer than 500,000 logic gates in 2004.

However, the revenue for SOC-SLI chips (ASIC and programmable logic device, or PLD) exceeded $15 billion in 2004. The expanding availability of substitutes in higher-gate-capacity PLDs, the cost of foundry manufacturing and third-party design services have become the main arenas for competition. The cost structure for these "low-end" chips needs to be evaluated more closely.

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