Editorial

IC Industry Trends Drive Library Companies' Growth

The IC and library vendors are developing capabilities to improve design migration.

by Jonah McLeod

A major change occurring in the electronics industry is the emergence of library companies such as Aspec Technology Inc. (Sunnyvale, CA) and Compass Design Automation Inc. (San Jose, CA). Factors spurring this growth are the continuing shortfall in integrated circuit designers and the rapid, worldwide growth in new foundry capacity.

How a shortfall in IC designers can drive up demand for libraries is illustrated by the following example: a major IC company has just brought up a new, 0.35µm, CMOS process line. Now, it must create design libraries for the new process if it is to attract outside customers to use the new capacity. The IC company can apply its engineering talent to creating libraries. Or, it can contract out the development and use its engineers for revenue generating tasks.

IC companies, such as Samsung Semiconductor Inc. (San Jose, CA), contract out library development for smaller cells and use on-staff engineers for library development of complex megacells. Large cores (digital-signal processor, Ethernet Controller, and MPEG) produce revenue for an IC company.

The same problem confronting the IC vendor that fabs its own chip and third-party designs also afflicts the fabless semiconductor manufacturer. Several foundries supply manufacturing capacity to a fabless IC maker. The fabless IC company maintains its own libraries for each of these foundries. As foundries change their manufacturing process, the fabless IC maker must change its libraries.

When a fabless company adds a fab to increase its capacity, it must mount the library development effort again. Aspec and Compass have both recognized the fabless companies' frustration with this overhead library maintenance function. Aspec has a solution it calls Design Integration Technology. Compass' solution is called Passport.

The idea behind both solutions is to off-load the library maintenance from both the fabless IC company and the foundry. The library company creates design kits for each foundry. Fabless IC companies use the kits to fab their designs at any foundry the kits support. In a perfect world, the library companies would produce kits for every IC foundry; in reality, they support only a fraction of the larger fabs.

Charlie Cheng, director of marketing at Aspec, points to a trend resulting from ready availability of libraries: the emergence of a new form of fabless company. Cheng says small companies, consisting of a small design team with a hot design, are contracting with Aspec to convert their HDL descriptions into a GDSII file for fabrication at a foundry. Aspec shares in the revenue stream.

The other factor driving IC vendors toward contracting with third-party library companies is the expanding number of foundry-only fabs being built. A company such as Taiwan Semiconductor Manufacturing Company Ltd. (Hsin-Chu, Taiwan) has a lower cost structure than a conventional IC company such as Texas Instruments Inc. (Dallas, TX). TSMC spends its R&D dollars on silicon production, engineers, equipment, and facilities; others must spend R&D funds on library maintenance.

For the foreseeable future, the factors contributing to the continuing growth of library companies show no signs of abating. As a result, expect new library ventures to emerge and existing companies to boom.

Jonah McLeod is editor-in-chief of Integrated System Design.

integrated system design  March 1996