Processor-core IP companies the hardest hit by semiconductor slump

Processor-core IP companies the hardest hit by semiconductor slump
By Darrell Dunn, EBN
April 11, 2003 (5:58 a.m. EST)
URL: http://www.eetimes.com/story/OEG20030411S0011

When the final account of this most persistent of semiconductor market downturns is eventually written, the toll on the once burgeoning industry for processor-core licensing may be recorded as the most severe.

The multiyear economic downturn, during which capital expenditures and new-product research and development have been whittled away, has wreaked havoc on many companies that at one time showed the promise of becoming the next ARM of the IP industry.

The reality, however, is that there is only one ARM, and that fact was unlikely to change even had the downturn been less harsh. ARM has become the de facto standard for cellular handsets and has helped create an industry that ships hundreds of millions of mobile phones annually. Even its closest competitor, MIPS Technologies, a strong, viable force in the embedded-processing sector, will likely never achieve the success of ARM.

As for the dozens of other processor-core licensing compani es, many have already closed their doors despite offering technology that in some cases achieved benchmarks superior to established general-purpose devices. Other licensing-oriented semiconductor companies survive, but have gone into a state of hibernation from which they may never emerge.

A cursory run through the Websites of most processor-core licensing companies yields little activity, Indeed, when the last press release a company has put out dates back to 2001 or early 2002, there is clearly something amiss.

When the Embedded Systems Conference is held in San Francisco later this month, the roster of participating IP licensing companies will be much lighter than in previous years. Some of these enterprises obtained a number of design wins two or three years ago, but resource-strapped OEMs and other semiconductor suppliers that were their source of livelihood have been unable to move beyond the design stage and follow up with actual production orders.

DSP IP companies BOPS Inc. and Chamele on Systems Inc. are already history. In the past two months, Philips Semiconductors moved to reabsorb two DSP IP providers that it had earlier spun off, TriMedia Technologies Inc. and Adelante Technologies Inc.

When the smoke clears, maybe as early as 2004, there will be some processor-core licensing companies that undoubtedly will surface again. New companies will start up as venture capital funds re-emerge. But the boisterous IP heyday of the late '90s will likely never return.