SoC value linked to software

Richard Goering, EE Times
(12/12/2005 9:00 AM EST)

San Jose, Calif. — Chip designers can no longer live by silicon alone, said analysts at last week's Gartner Dataquest semiconductor industry briefing here. System-on-chip (SoC) makers must also provide embedded software, which is where the key value proposition lies, analysts said.

The warning was clear: If you don't recognize the importance of software, you may be out of business. John Barber, research director at Gartner's semiconductor and design research group, said that the semiconductor industry will lose billions in unrealized revenue opportunity if it continues to undervalue software.

"Unprepared vendors will completely miss market windows, and SoC vendors will be squeezed out of markets or won't be able to get into them," Barber said. "Hardware will become more and more of a commodity. The key differentiation is in the software."

Gary Smith, managing vice president of Gartner's semiconductor and design research group, had a similar warning. "The 'S' in SoC stands for system, but the semiconductor guys don't understand that," he said. "Embedded software is a major competitive component."

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