MIPS-Chipidea merger transforms SoC design
MIPS' Bourgoin eyes business evolution.
MIPS Technologies Inc.'s Rs.594.59 crore ($147 million) acquisition last August of Chipidea Microelectronica S.A., a privately held supplier of analogue and mixed-signal intellectual property, advances both companies' ambitions of transforming SoC design.
In today's typical SoC design cycle which can take a year engineers decide on a processor and OS, think through the architecture and work on proprietary technology. But they often postpone decisions on analogue components until the eleventh hour, creating an integration gap that leaves analogue designers with a host of customisation chores at the last minute. The resulting delays can stand in the way of finishing the SoC. "I've seen many customers even large semiconductor companies unable to migrate to the next node, or having to skip an entire generation of technology," remarked John Bourgoin, MIPS' president and CEO.
With the combined forces of MIPS and Chipidea, "for the first time in the industry, customers can see a full pool of technologies from the beginning to the end to design their SoC," said Chipidea CEO Jose Franca. "This could be a very powerful proposition."
MIPS' bailiwick, of course, is processor cores; Chipidea supplies analogue and mixed-signal IP for the wireless, digital consumer and connectivity markets. Gartner Group analyst Christian Heidarson observed that while "MIPS has had a very successful year," it has "still looked like a bit player next to ARM." With the Chipidea acquisition, he said, MIPS strengthens its IP arsenal to mount a challenge to its dominant rival.
The deal is "huge news for the IP industry," Heidarson said. "The market for design IP is consolidating very rapidly. This market doesn't look good for startups. Unless you have strong patents and a genuinely unique and valuable technology, the design service business model is probably a better idea."
Chipidea's Franca touts 'full pool' of IP.
Bourgoin called the acquisition "an evolution of the IP business"; Franca termed it "a step toward a virtual SoC." Either way, their aim is clear: to enter the customer's SoC design process early in the cycle. Rather than follow the conventional method of inserting the analogue IP as gap filler, requiring analogue design customisation, they expect to offer customers standard blocks that combine digital and analogue.
"If MIPS can shield mixed-signal integration issues from the SoC designer, this would be of tremendous value," Gartner's Heidarson said. MIPS should absolutely put a priority on developing complete MPU-plus-mixed-signal subsystem IP products."
In the short term, MIPS can integrate connectivity and power management drivers from Chipidea into its software platform, Heidarson added.
The integration of microprocessor and analogue IP is a visible trend in SoC development, and the addition of Chipidea's analogue IP to the MIPS portfolio strengthens the latter's position and expands its customer base. MIPS previously had made "zero investment" in analogue technologies, Bourgoin acknowledged. "That's why this is such a nice fit."
MIPS chose Chipidea both for its strong customer base and its financial robustness. Moreover, two-thirds of MIPS' customer base overlaps with Chipidea's. Those customers include Toshiba, Sharp, NXP, STMicroelectronics, Zoran, Qualcomm and Texas Instruments.
Currently, 88 per cent of analogue design is done internally at most leading semiconductor companies, according to Bourgoin. Nonetheless, Chipidea has successfully competed against in-house analogue design teams, possibly because it has anticipated a shift to third-party licensed analogue IP, much as the market has already shifted away from in-house processor core design.
"When it comes to analogue, either it works or it doesn't," said Bourgoin. But for many chip vendors, analogue is "not a differentiator." He thus questioned the value of investing to design wireless or power management chips in-house.
"Analogue is hard to do. It requires special skills," he said. "Over the last 10 years, Chipidea's 250 engineers have delivered a variety of analogue IPs in GDS II format that actually work." GDS II is a de facto standard for IC layout data exchange.
Bourgoin said he expects the companies' operational merger to be straightforward. Chipidea will become a business group of MIPS Technologies, and its product portfolio will continue to be sold under the Chipidea brand. Franca will become group president and general manager and has been appointed to the MIPS board. The sales, finance, legal, HR and marketing functions will be consolidated, Bourgoin said, but the MIPS and Chipidea design teams will remain intact and work in parallel.
Except for a few commonalities in drivers and tools, MIPS and Chipidea design teams have very different knowledge bases, with "not a lot of engineering overlap," said Bourgoin.
Chipidea buy makes MIPS the second largest design IP vendor.
Heidarson, meanwhile, pointed to some potential bumps in the road to a unified company. "There are culture differences to consider between the digital and analogue engineering operations," he said. "MIPS needs to be wary of attrition among analogue engineers who might prefer to work for pure analogue players."
Heidarson also suspects it will be difficult for the MIPS sales force to sell analogue products effectively.
"MIPS should consider providing full-chip solutions to some customers. That could have a very positive impact on their financials," he said. But he added a caveat: If MIPS takes that route, "fabless customers may worry that it puts MIPS into a competitive position with them."
- Junko Yoshida
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