The Silicon Group Says, "SOC It to Us"
Austin--The brave new world of silicon intellectual property (SIP) and systems-on-a-chip (SOC) technology is creating many business opportunities and companies to take advantage of those opportunities. One such company is The Silicon Group Inc. (TSG), a contract chip designer.
The Silicon Group actually dates back to 1992, long before people started to sling around the SIP and SOC acronyms. Its co-Founders Carl S. Dobbs, chief executive officer, and Michael B. Solka, president, came out of Ross Technology Inc., an Austin microprocessor design house that went out of business at the end of 1998.
TSG is one of a handful of companies that does chip design under contract, working for such chipmakers as Motorola Inc. and Advanced Micro Devices Inc. It also helps customers with design tool integration and lining up design cores, among other services.
The increasing complexity of chip design has led the top vendors of electronic design automation (EDA) software to migrate to the design services field, in various levels of involvement. Cadence Design Systems Inc. was the most aggressive in the field, establishing "Design Factory" offices around the world.
Last year, Cadence hired away the entire StrongARM design team in Austin, just as Digital Semiconductor was being acquired by Intel Corp., and designated Austin as the site of an expanded office for design consulting services and its North American customer support center.
More recently, however, Cadence restructured its Cadence Design Services Network last November, closing several offices and laying off about 560 employees, some 12 percent of its workforce. It took a $45 million charge against earnings in the fourth quarter of 1998 to cover costs associated with the restructuring.
So, with Cadence a little chastened by its experience in helping clients design their chips, The Silicon Group gained a little breathing room in its field. Just about the same time last year Cadence was conducting the "Night of the Long Knives" in its Design Factories, Synopsys Inc. announced the formation of a $20 million venture-capital fund to make investments in small companies involved in SOC design technology. One of its first investments was in The Silicon Group. Synopsys is a minority equity shareholder in the Austin company.
Synopsys' unspecified investment is the first outside investment in TSG. The founders of the company have funded the venture out of their own pockets to this point.
One advantage TSG has over the EDA vendors and their service organizations is that "we're not trying to sell (customers) any tools," Solka observed. TSG uses a wide variety of commercially marketed design tools, including products from Avant! Corp., Synopsys and Mentor Graphics Corp.
In April, TSG announced an agreement with Lexra Inc. of Waltham, Mass. Lexra is a two-year-old SIP firm specializing in developing RISC and digital signal processor (DSP) cores for the embedded market. Its Founder is Charlie Cheng, president and chief executive officer, and formerly vice president of marketing at Aspec Technology Inc. and a marketer at Viewlogic Systems Inc.
Lexra and TSG formed an exclusive partnership to make Lexra's LX4180 core available with custom porting services by TSG.
As the scene in chip design shifts from semiconductor manufacturers to system OEMs, "TSG is looking to grow out of Austin, looking to get some recognition," Solka said. Putting together SIP and implementing SOC technology is a complex undertaking, he noted. "The concept is easy to grasp. The implementation is not so easy. In reality, it's pretty non-trivial."
TSG is looking to put together more deals like the Lexra arrangement, Solka said. The Silicon Group now has 13 employees, working out of a Victorian home-style building in a picturesque Austin office park, and hopes to double in size by the end of 1999, he added.
One ever-changing factor in SIP is the legal issue - ownership of SIP, proper licensing, etc., Solka said. "One group of people that has figured out the IP business is the lawyers," he commented, "and they're cranking out a lot of billable hours."