Study: FPGAs to grow faster than broader IC market

SAN FRANCISCO—FPGA revenue is projected to grow to nearly $3.5 billion in 2013 from $2.55 billion in 2009, a faster growth rate than is anticipated for the broader IC market, according to a study released Monday (July 13) by market research firm The Linley Group.

The report, titled "A Guide to FPGAs for Communications," concludes that FPGAs are likely to continue displacing ASICs and application-specific standard products (ASSPs) for many applications. But the report also finds that FPGAs cannot compete with the cost advantages of ASICs for many high-volume applications.

FPGAs will continue to cut into the ASIC market, but are unlikely to displace the highest-volume ASICs found in video-game consoles, set-top boxes and other consumer applications, according to the report.

"What it boils down to is, if you have markets that are worth $100 million or less, it doesn't make a lot of sense to do an ASIC," said one of the study's authors, Jag Bolaria, a senior analyst with The Linley Group.

Bolaria noted that rising costs for design and other non-reoccurring engineering expenses make FPGAs a more attractive option than ASICs for most applications outside of high-volume applications. He agreed, basically, with the position of Xilinx President and CEO Moshe Gavrielov and others that these trends would enable FPGAs to bite into the market share of ASICs.

But Bolaria also suggested that FPGA proponents paint an overly optimistic picture and noted that the use of FPGAs doesn't eliminate front-end design effort. He acknowledged that going with an FPGA over an ASIC does eliminate photomask set costs, which can be well into the millions at advanced nodes.

"There are certainly some savings, and FPGAs do allow you to get to market quicker," Bolaria said. "But the issue is not as black and white as it is sometimes painted."