Electronics IP Industry View - How important is the Intellectual Property market? (by Dr. Russ Henke, President of Henke Associates)

"FASTER - BETTER - CHEAPER - SAFER … will the pressure never cease? It would seem not! Every business enterprise faces accelerating change and aggressive competition. High-Technology companies may be the most challenged of all! Rapid growth - shorter product life cycles - fewer people - stretched management resources - increased security … all push both vendors and users to the ragged edge."

Familiar words, to be sure. But those who have toiled in high technology for decades argue that these competitive challenges are not recent trends at all; they applied equally in the 1950's and 60's! During the last third of the 20th century, the emergence of automated software and graphics tools to help improve designer productivity across the entire electromechanical spectrum are without doubt direct responses to these ongoing competitive challenges.

Moreover, clever designers and engineers have always sought to reuse previous, successful designs and components when confronted with a fresh design challenge. If a solution worked before, why re-invent the wheel? During the early years in electomechanical engineering, when existing designs were still archived on paper, blueprints, or microfiche - whether for an engine connecting rod or for a radio's printed circuit board - design reuse was somewhat awkward. Nevertheless, reconstituting an existing design was still beneficial in terms of both time savings and improving the odds that a new design would actually work the first time. In general, the greater the level of reuse, the better, even if total innovation were occasionally mitigated.

Then and now - to be reused, of course, a valid previous design needs to be easily retrieved. With early automated software, however, many designers would often opt to do a fresh design for a new component completely from scratch, rather than endure the hassle of laboriously searching for old design files whose correspondence to the actual part might be in doubt. The emergence of modern automated mechanical CAD/CAM and electronic design automation software systems not only adds speed and efficiency, but also provides convenient part data management tools to track older designs and the multiple versions of the current design under development.

Indeed, many of today's mechanical assemblies and electronic circuits are so complex that they cannot be designed at all without design automation tools. Accordingly, the benefits of improved time-to-market via reuse become even more important.

Clearly, electronic systems manufacturers who most successfully leverage their own in-house designs for reuse possess a compelling advantage over competition. The existing designs often become so valuable that these assets have been termed, "Intellectual Property" (IP), a moniker borrowed from the legal profession.

Not unexpectedly, electronics entrepreneurs quickly identified a market opportunity to license their in-house IP to other companies, creating brand new revenue streams and helping to speed greater numbers of new electronic products to a worldwide market.

Today, electronic ASIC, IC, MCM, board and systems designers nearly always face tight time-to-market windows. To meet their development schedules, designers often have no competitive choice other than reuse of their own and/or third party intellectual property! This is especially so when designers seek to place an entire complex system on a single chip (i.e., when SoC designers integrate the functionalities of previously discrete IC's onto a single silicon die). Thousands of successful designs testify to the fact that the extra costs of IP license fees and/or ongoing IP royalties paid to third-party IP providers, are well worth it.

IP providers today supply an incredible array of hard and soft reusable cores, design blocks and "integration platforms" for a broad range of digital applications, such as DSP processors, encoders/decoders, bus interfaces, micro-processors, memories, micro-controllers, and related data communication cores. Moreover, soft cores are usually available in Verilog and/or VHDL, which can be synthesized and targeted to almost any semiconductor foundry process. Most available soft cores and IP blocks are fully documented, pre-tested and verified, and support the software tool flows from most leading EDA vendors.

Not surprisingly, sizeable consulting opportunities materialized to assist systems designers with the entire complex process. The professional services divisions pioneered by EDA vendors Mentor Graphics and Cadence in the early 1990's, are good examples. Such outside assistance is especially important when SoC designers encounter the often-deleterious physical effects and design rules of technologies that are approaching nanometer scales.

1- How important has electronics IP become? How are the public IP providers doing financially?
2 - How has the Group-of-8 (G8) IP providers performed financially?
3- G8 performance guidance for the near future
4- How have the G8 electronics IP Providers fared in the 2003 YTD stock markets?
5- Conclusions of this Electronics IP Industry Commentary:

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