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CE apps to drive IC demand

Posted: 08 Dec 2006     Print Version  Bookmark and Share

Keywords:consumer electronics  CE  intellectual property  IP  Rambus 

Consumer electronics (CE) now drives chip demand, Rambus Inc.'s top executive says, and it's proving to be the most demanding customer of all.

Speaking on the "IP Model for Next-Generation Design Platforms," Rambus president and CEO Harold Hughes said the CE segment is the most demanding in part because the architectures of mobile electronic systems is very different from the plug-and-play systems working on electric power.

It's a different model from the 1980s, when government organisations drove semiconductor demand, and the 1990 to 2005 period, when business needs dictated chip consumption, he said, adding that the intellectual property (IP) business is seeing a similar change of scene.

"This difference throws up different needs on the semiconductor players, and the need for specialist semiconductors is growing," he said. Of the Rs.1,365,600 ($300 billion) chip market in 2008, semiconductor R&D is worth between Rs.2,27,600 crore ($50 billion) and Rs.2,73,120 crore ($60 billion), opening opportunities for companies like Rambus.

That shows in the game business, which is making huge demands for memory. In that field, Sony is pitched against Microsoft, opening up a big market for Rambus, which also benefits from the battle for the PC world between Intel and AMD, and the competition among the various wireless handset manufacturers.

The ideal IP business model, he said, is the one hitting the sweet spot that combines patents and products, rather than patents only or technology products only. The IP model is not easy to succeed with, Hughes said, unless the company develops a core technology, uses it to create technology products, find a few customers to whom to license it and then licenses the technology itself more broadly. Other problems persist for IP companies and wannabe IP companies, given the expensive and intense litigation that characterises it.

"IP licensing is always difficult," Hughes said. "There will be people who will not pay for IP and legal issues follow. This is an accepted part of the IP business now so companies that stick to mere licensing are on a long road to hope. And while outsourced IP development is growing, success is more likely to come from developing IP and delivering it as a full package to customers."

"The IP model in India, focused on the services-alone model, is not likely to do well," he predicted. "Unless you focus on the architectural issues, you are not too likely to do well in the IP business. In a world of increasing specialisation and fierce competition—especially in the consumer electronics space—the IP business may be the ultimate specialisation."

Rambus has 539 issued patents, with 479 pending, and the company plans to drive patentable R&D focused on architecture-level innovations, which is where patented work really pays off, Hughes said. The company will focus more on XDR, PCI Express, Ethernet and Rapid I/O and will grow its track record in creating IP and more importantly, protecting it, he added.

- K.C. Krishnadas
EE Times

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