Then, I asked for the IP vendors themselves to respond to a set of questions. Here's one letter to the editor from Richard Wawrzyniak, an analyst with Semico Research Corp.:

Editor,

I (and I expect many others), read with great interest your article on the current state of the 3rd Party IP industry and how it is a 'lost cause'! I can understand that statement if one is focused solely on the financials of different IP companies. Many companies have yet to make a profit even though revenues continue to increase. Perhaps the disconnect here is one of being focused too much on the financials as the sole measure of importance as opposed to being a little more realistic in outlook regarding the future and relative importance of IP to the semiconductor industry as a whole?

What should the outlook be then, for this market? You cannot make the case that the financial side of things is the most important part of the picture and should be the sole focus of any discussion. It would be very difficult to have a discussion about Intel or Microsoft or Apple without speaking about their respective technologies and the markets they have enabled. These companies and many others have had, and continue to have, an impact far beyond the status of their current balance sheets.

Simply stated, the IP industry has got to be one of the most exciting, vibrant industries on the face of the planet! Nowhere else can you find the combination of dynamic growth, innovation, competitive pressure, market evolution, lightning-fast product evolution and creativity besides the IP market. Arguably, the entire SoC market depends on the IP industry to deliver competitive, cutting edge, best-in-class solutions and at extremely competitive prices too.

In answer to your specific questions.

EE Times: Explain why IP is not a lost cause. (Semi IP can accelerate the time to market for a design is not a good reason. We already know that.)

Wawrzyniak: It is not just about 'time-to-market', it's also about just being able to create the product in the first place. It is virtually impossible to craft a complex System-on-a-Chip (SoC) today without the use of IP blocks from 3rd Party Semiconductor IP vendors or from IP crafted for re-use designed by internally driven projects. The increase in transistor budgets that are made possible with every new process node dictate that designers cannot hand craft their silicon to fit the target application as they did even ten years ago. They need assistance in collecting the IP necessary to assemble these silicon solutions. The expertise has to come from somewhere!

I believe the IP industry today is where the semiconductor industry was almost 35 years ago when the first Standard Logic families were just entering the market. Back then the IEEE and JEDEC headed up efforts to define the functionality of each part and to standardize the timings, pinouts, packages, part numbers, etc., of these devices. This effort worked and was accomplished in a reasonable amount of time because the number of vendors was relatively limited -- approximately 20, and the number of customers were somewhat limited to the large mainframe manufacturers, the military, some industrial control applications and a few automotive and medical applications. Because the number of vendors was small and the number of large potential customers was limited, the effort needed was relatively self-contained and succeeded in spectacular fashion!

If we fast-forward to today's market environment we see a similar situation but with the added twist of not 20 vendors, but 200+ IP vendors and thousands of SoCs populating literally every possible application you can visualize, all using 3rd Party IP. This makes the task of getting everyone on the same page much larger and harder. I have no doubt this will be accomplished eventually. Just because the process of creating standards will take longer to accomplish does not mean it is impossible, or a lost cause. It's not a matter of 'if', but of 'when'.