Study: foundries ship more IP than IP vendors

LONDON – Chip foundries provide more design intellectual property (IP) to fabless chip companies than the IP core licensors whose principal business it is, according to the 2010 fabless ecosystem survey conducted by a university professor for the Global Semiconductor Alliance (GSA) industry body.

Silicon foundries are responsible for, on average, 18 percent of the design IP cores in chips, followed by 16 percent, which come from third-party licensing firms. The leading source of design blocks is the fabless chip companies themselves, which author 66 percent of the design blocks, the survey found.

The survey was conducted by Professor Rahul Kapoor, Management Department, Wharton School at the University of Pennsylvania, based on responses received from senior engineering, marketing and supply chain executives from 37 publicly-listed and 25 private fabless semiconductor companies. The regional breakdown of the 62 respondents was that 75 percent were based in North America, 16 percent in Asia, 6 percent in Europe and 5 percent elsewhere in the world.

As well as a the rising significance of foundries to IP cores, The survey also found that IC product cost breaks down into four principal cost centers; with foundries taking 54 percent for manufacturing the devices, package and assembly houses take 21 percent, test supplier 15 percent and third-party IP responsible for 7 percent of IC product cost.

Engineering personnel at fabless chip companies are split, on average, 46 percent IC design, 23 percent software, 20 percent system design, and 12 percent are IC manufacturing and test engineers, the survey found.

IP reuse is extensive, according to the Wharton-GSA survey, with about 63 percent of the design IP re-used in the revision of an existing IC design and about 44 percent of a fresh IC design being reused IP.

The survey also covers fabless chips company's time to market. The average time to market, defined as the period from design start to mass production, is about 14 months for a revision of an existing product design and 19 months for a new product design. A shift to a new manufacturing process increases the time-to-market by about three months.

The 25-page report is available from GSA without charge.