Another way of looking at it is that riding Moore's Law now offers diminishing functional benefits and unit cost benefits but has demanded exponentially increasing NRE costs.
For most people it is time to step of the escalator. It should be no surprise that instead of spending $10 million or $50 million and being able to sell a company for $250 million we now have cost and deal values flipped around. Venture capital firms have spent $100 million to $500 million and more and in some cases can only realize $50 million in value. No wonder those VC firms started running away from rather than towards similar investment opportunities in recent years.
The good news is that the solution is clear and is being adopted around the world. Some call it More-than-Moore. The International Technology Roadmap for Semiconductors (ITRS) produced an excellent white paper in 2011 that pointed out that some applications based around health, transport and energy really benefit from More-than-Moore rather than from miniaturization. And while it is true that ITRS said other applications in security, communications and infotainment can take benefit from billions of transistors on a die it is clear that only one or two companies will be able to command the volumes to justify the cost.
Therefore for most startups the key is to be prepared to get off the crutch of Moore's Law and walk free. Give yourselves a cost advantage by NOT working at the leading-edge and don't routinely just try and push some generally available communications standard or other into digital silicon. It comes down to good old fashioned innovation born of being smart in design and radical in terms of the system-level functional improvement delivered.
That's what companies such as InvenSense Inc. (Sunnyvale, Calif.) – a recent IPO – have done with MEMS-based inertial measurement and navigation components and what Nintendo did with the Wii control baton. It is what PrimeSense Ltd. (Tel Aviv, Israel) did with the optical and infra-red vision system that is at the heart of the Microsoft Kinetic system. It is what scores of other startups are doing and it is one of the reasons I am not overly concerned about a lack of investment in semiconductors. It is also noticable that a number of MEMS acquisitions have commanded good exit prices. Murata Manufacturing Co. Ltd. has announced it has agreed to buy VTI
Technologies Oy (Vantaa, Finland) for about 20 billion yen (about 190
million euro or $260 million) in cash and SensorDynamics AG went to Maxim Integrated Products Inc. for about $130 million.
It is true we are not seeing the same amounts of venture capital invested overall as we did in the first half of the last decade, but good ideas continue to get backing. And this is because silicon, semiconductors and electronics in their broadest manifestations are still a great way to create wealth and improve the well-being of the world.
MEMs integration into CMOS will be the next big opportunity. Stand-alone MEMS in MCM or other exotic packaging may be cost prohibitive unless there are no options for such integration for performance or complexity reasons. MEMs oscillators especially could be a dying business since CMOS based XTAL osc replacement is possible (e.g. IDT or Silicon Labs). The performance gap has narrowed significantly for such oscillators compared to XTAL.
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