The number of ASIC designs has collapsed, with potentially serious implications for the intellectual property (IP) market.According to supply chain analyst iSuppli Corp., there were only 2,000 ASIC design starts last year, fewer than half the accepted estimate.
Jordan Selburn, principal analyst at the company, said: "The collective wisdom has grossly underestimated the number of design starts. IP providers are in trouble. This is why the IP industry is a disaster for all but a few companies."
iSuppli's figure is based on wafer fab capacity, end product use and data collected directly from ASIC houses. Selburn said the 2,000 ASIC design starts stands in stark contrast to the 4,000-plus figure that had been accepted by most companies, and is far short of the 10,000 to 12,000 starts seen annually in the mid-1990s. Nor does iSuppli believe that the market has reached its lowest point. It is forecasting only 1,750 design starts for 2006, when syste m-on-chip designs will account for 80 percent of starts, Selburn said.
The ASIC industry saw its worst year ever in 2001, with revenues falling more than 30 percent to $10.6 billion, with much of this collapse due to the mobile communications downturn, iSuppli said. That revenue figure will grow by around 10 percent a year until 2006, with an increase in revenue per design, Selburn said.
IBM Corp. was the leading ASIC provider last year, followed by Fujitsu Ltd., LSI Logic Corp. and then NEC Corp.
The iSuppli research does not include design starts or revenues from application-specific standard products (ASSPs), which also use IP from third parties.
John Cornish, director of CPU programms at processor designer ARM Ltd., a major IP provider, said: "It's very difficult for us to tell the split between ASIC and ASSP, but for us it's fairly neutral. They are both designed with the same technologies and the only difference is that an ASSP is sold to more than one customer.
"The highest vol ume end products do tend to be ASICs where the OEM is manufacturing millions of units. Then they have the economic and business justification to do the work as an ASIC and thus differentiate their products from the competition which may not have the volume and has to use the ASSP.
"There may be IP providers who have licensed OEMs directly that might have more of an issue," Cornish said.
John Hall, vice president of European operations for MIPS Technologies Inc., another leading IP provider, said: "Things are moving very fast out there and people are trying to reduce the number of designs that they do because of high mask costs.
"It's a problem if the IP supplier is dependent on the ASIC market, but for MIPS the vast proportion of designs are ASSPs. Programmability and performance are the order of the day and that's good for the ASSP business."