Letter to the editor: Foundry vs. IP (Les Wilson)

(08/20/2007 11:18 AM EDT), EE Times
 
I received a plethora of e-mails regarding my recent article, entitled "Opinion: Semi IP sector is a lost cause"

Then, I asked for the IP vendors themselves to respond to a set of questions. Here's one letter to the editor:

Editor,

I agree that the silicon IP market is in a tragic state. I think the often cited quality issue is an out of date stereotype. I have witnessed plenty of high quality IPs.

The fundamentals of a business are in question here. Why are no new SIP companies forming? They cannot make a profit. The customers tend to think they are just hiring labor with no value add so they negotiate the IP company down to zero profit.

Only microprocessor core companies have leverage at this point, because they have established a brand (ARM, MIPS etc.) Most IP companies cannot charge a royalty so profit is pretty thin.

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