The old chestnut insists that the grass is always greener on the other side of the fence. Or, in this case, the grass always seems greener in the other guy's business model. Semiconductor IP companies too often seem covetous of the nice, certain, large revenue streams enjoyed by fabless chip companies. Fabless companies, on the other side of the barbed wire, cast longing glances at the nimbleness, low fixed costs and absence of NRE in the IP world.

Now, as we enter the grinding period of attrition at what is probably the trailing edge of the industry depression, we are seeing more companies take the bait and try to switch business models.

Consider the poor pure-play IP company. It's not just the lack of revenues-everyone has that problem. It's that the really good IP companies have been landing the design wins, often at or close to plan. But with no end-user demand for electronic stuff, the IP companies' customers can't ship. And, of course, the IP vendor had to weight his license away from front-end fees and toward per-unit royalties in order to land the business. So, the big design wins are resulting in lots of added support costs but little revenue. Many projects are getting driven to completion and then scrapped.

From that point of view, the life of the chip vendor must look wonderful. You just design a chip-just like designing IP, right?-and send off a modest check to get back a bunch of ICs, which you then ship to people and they pay you, right away. What could be better?

Of course, the chip vendor sees a different world. Moving the design flow to 130 nm or 90 nm is horrendously expensive. Risks multiply at every turn. Mask sets cost more than small companies do, and ASIC NREs are out of sight. And in the post-COT world, no one wants your off-the-shelf chip; you have to modify the thing for every single customer. Oh, if you could just ship them RLT.

Companies on both sides are making serious plans to change models, often at considerable expense. Odds are, by the time either type of company could change its model, the situation will have shifted.

Ron Wilson covers microprocessors, programmable/reconfigurable logic and the chip design process. He can be reached at rwilson@cmp.com.