FPGA startup Tier Logic folds

7/23/2010 1:05 AM EDT

I remember one of the books I published while at McGraw-Hill was about ASICs, back when they were first coming out. I remember the marketing presentation, about how this technology should allow relatively inexpensive customization, and a quicker time to market. It seems to me that there is still an awful lot opportunity here; it's just that the method of capturing it didn't work. Maybe future ventures should remember what RCA did to sell some of its products, which was to create demand by integrating manufacturing with end-use, making sure there was plenty of entertainment product to drive purchase of radio and TV products. (Sony does something like that, right?) That means some ASIC makers might need to be integrated with system makers, which in turn might be integrated with end markets. For example, a component manufacturer might be part of an e-book maker, which in turn would own a publishing company. Though recent economic fashions have leaned towards smaller, supposedly more efficient and agile, high-tech companies, that efficiency and agility was useless to this company in the end. To me that means, sometimes the benefits of large-scale integration outweigh the costs of size. At the risk of sounding like a Monday-morning quarterback (okay, I am being a Monday-morning quarterback), in the absence of committed investors who could also provide definite built-in sales for this company, maybe it would have been better to market the patents to the highest bidder from the beginning.

7/23/2010 1:42 AM EDT

Well, I would not bet on the technology never reaching the market again. It is theoretically possible, given someone can recoup the lost patent portfolio and set up an operation. Of course, Matrix Partners might have to be less stingy in letting go of the patents it holds of the dead company.

Having had a good look at their technology, what I feel is that the concept is already proven. What Tier Logic had was a proven technology. What they lacked and the VCs were not convinced was on the market. Therefore, one possibility is that an established player in the FPGA oligopoly might make a bid on the lost patents and use these to add value to their operations.

Second viable possibility is the TFT technology spin-off. In the process of proving its concept workable, Tier Logic, in collaboration with Toshiba, has scaled down the TFT transistors over process node almost a ten-fold smaller. As a result there is huge scope for development in the TFT display arena. Therefore, an established player in the display business might see the potential of some of technology.

7/23/2010 2:49 AM EDT

Dylan: regarding your 'Just over a year ago, startup CSwitch Corp. confirmed that it halted operations and was seeking a buyer. No buyer has ever been publicly announced.' Agate Logic acquired CSwitch assets 8/2009 and the info was made public.

It is always unfortunate that good technology is stopped short due to lack of funding. Best of luck to all affected.

7/23/2010 6:52 PM EDT

Speaking as a former FPGA startup participant the issue has never been funding or technology- it is and always will be customers.

If you can find a set of customers underserved by the existing FPGA/ASIC companies and these customers are really in pain and they represent a significant share of the market you will get all the funding you need. (Success == Underserved && Pain && Share)

Expect a few successful startups in this space over the next 5 years as the market continues to grow and fragment.

7/23/2010 7:21 PM EDT

@Camille. Thanks for the info about CSwitch. I missed that altogether but will update the article to reflect.

It's too bad about Tier Logic. I can't say that I knew the technology well enough to form an opinion about its merit, but I do agree with Paul Hollingworth that its tough for any chip startup to get funding nowadays, and I guess there is a real fear that this is not a passing fad. Where will innovation come from?

The established FPGA vendors certainly work to give their customers more (and best each other), but they have so much invested in their architectures that it's hard to image them coming way out of left field with a completely new technology, even if it offers tremendous advantages.

On the other hand, both Actel and Xilinx have made announcements this year about incorporating ARM cores in their devices. So that at least is thinking outside the box.

But I think it would be good for the market if some of these startups can thrive. Or maybe it's just a good underdog story.

Farewell, Tier Logic. We hardly knew ye.

7/25/2010 3:04 AM EDT

It's really too bad. There are two issues at play here. First, does FPGA already have enough players? Second, does anyone trust a new technology to be developed only by a startup, rather than say, a consortium of larger high-tech companies?

7/25/2010 12:55 PM EDT

Having followed this industry for 25 years, I don't think there has been a successful FPGA start-up in more than 20 years. Actel was the last one. Most of the recent ones (under 5 years) are all fighting for a market that can't support more than two, regardless of the "niche" they are trying to fill. Indeed, as one industry pundit said, the gross revenue of Purina Dog Chow exceeds the revenue of two electronic markets...that of EDA and FPGAs. A new (and different) customer base, as someone said, is the issue, not innovative technology. The road to hell is paved with technology...

7/25/2010 2:05 PM EDT

I haven't heard any customer complaints about Xilinx or Altera. In fact, for any chip sector, the top one or two vendors command more than 50% of the sector and almost always have the best customer service. So even with an improved economy, startups will tend to fail. The improved economy may even hasten their demise as those with largest market share grow larger.