Who has the best platform for the next generation of semiconductor devices: Intel, TI, IBM, Xilinx, Altera, ARM Holdings, Analog Devices, Microchip Technology, etc? What platform will large companies and entrepreneurs use to build the next generation of products?

One-time programmable processors are one source of competition for embedded system solutions; with Microchip Technology’s programmable microcontrollers and TI’s DSP platform.

Many entrepreneurs love Microchip Technology’s one time programmable processors and their straightforward API. Microchip has roughly a 50% market share for 8-bit processors and over 90 of its microcontrollers ship with some analog component. It also ships a microcontroller with flash memory. It has built a good developer community with over 3,000 embedded designers attending its’ thirteen separate 2007 conferences held in four different languages in seven countries.

It released a 16-bit product in 2003 and a 32-bit product in December of 2007; which both use the same development tools as it’s widely used 8-bit version. Microchip is the only microcontroller vendor supporting 8-bit, 16-bit, and 32-bit products on one development environment. Its 32-bit microcontroller, the PIC32 Family, uses the MIPS the MIPS architecture and was on EDN Magazine’s prestigious list of “Hot 100 Products of 2007″.

Microchips generic processors will never come close to the performance of PLDs, but it should continue to see success in products with lower performance requirements.

ARM Holding’s processors are the dominant processor for mobile phones and the most widely-used 32-bit microprocessor family with over 75% of all 32-bit embedded CPUs. Arm processors are soft core IP designs that can be embedded in ASICs or FPGAs and are really complimentary to hardware provider’s offerings.

Intel’s x86 processor has a large community, but an inherently slow architecture that has not seen very much success outside of the mainstream PC and server marketplace. Intel is creating a multi-purpose “programmable Intel architecture machine” called Larrabee for high-performance computing and discrete graphics. Larrabee will be Intel’s first “many-core” product” and is expected to be available in 2010. It is debatable how competitive this device will be with the devices in the market two years from now. In the meantime, how much embedded systems market share can the PLD vendors capture?

Texas Instruments‘ is the leading DSP platform with over 50% market share and is also a leading player in the high performance analog chip market. TI risks losing market share from several diverse competitors nipping at its heals such as platform PLDs targeted at DSPs and mixed signal devices, lower end device providers from China such as Vimicro incorporating custom and 3^rd party IP, end market specific mixed signal competitors such as Sigma Design’s DSP, and finally seeing competition for its single chip mobile phone solution (integrated application processor, baseband, and support pieces).

Analog Devices nascent and somewhat beleaguered DSP processor platform Blackfin has some strong advocates and Microsoft’s .Net Micro Framework, which is targeted at embedded systems, was recently ported to Blackfin; increasing the toolset available for devices built around Blackfin

A 3rd party EDA tools vendor may develop a strong integrated meta-platform that can act as a neutral party and potentially support building devices on top of several different vendor’s platforms. Granted this sounds more like a pipe dream.

While Altera and Xilinx have great platforms with strong communities there are concerns that that the business model for intellectual property (IP) is poorly positioned. A considerable amount of IP is given away by the FPGA vendors which undercuts some potential IP vendor’s offerings. The FPGA vendors will have to regulate themselves to providing the framework IP allowing 3^rd party IP companies to provide important add on intellectual property.

As with any company developing a platform there are conflicts of interest that must be adroitly managed. Battles for platform supremacy often have winner take all outcomes with all other competitors left as niche players. The next decade will see further consolidation around very few design platforms.

I have not included vertically integrated companies like: Samsung, Toshiba, IBM, Hitachi, Sharp, Philips/NXP, etc. I’ve also excluded companies not listed in the West like: Renesas, Hynix, and Freescale. Based on how poor the memory market has been and typically is I’m not sure Renesas and Hynix would make the list and Freescale’s market share has been dropping so they would not be in the top 20.

Since the bursting of the .com and telecom bubbles in 2000 the technology infrastructure market has evolved from a high growth industry into the cash cow phase. Winners such as Cisco, EMC, and Xilinx have tremendous free cash flow. While losers like 3Com and LSI are struggling to survive. With technology products especially there is little value purchasing second tier products so the leading companies only grow stronger until the next major secular inflection point. New startups are reduced to only attack market niches. For digital semiconductor chips as well as IP networking and storage the next secular inflection point is probably a decade or more in the future.

In this paper (and subsequent blogs) I will explain how the structure of the semiconductor market is going vertical due to the dramatic increase in semiconductor complexity requiring semiconductor design integration and how this favors the two leading FPGA (Field Programmable Gate Array) companies. The next generation semiconductor products will be designed using Xilinx and Altera‘s platforms.

A major acceleration in growth of the FPGA market should occur in 2010 based on several factors listed below. The two companies that control approximately 85% of the FPGA (Field Programmable Gate Array) market are positioned to exploit this inflection point in growth.

• When 65nm devices go mainstream
  • FPGA’s as SoC (for embedded systems), especially with ARM and MIPS soft-core processors
  • The continued acceleration of FPGA’s stealing market share from ASICs and ASSPs
• FPGA’s in new markets
  • x86 servers and PCs
  • Industrial & Automotive
  • Consumer devices
• Beginning of construction for the next generation communication network driven by
  • The communication equipment is nearly half of the FPGA end market
  • The glut of dark fiber from the .com bubble will be in use
  • The explosion of true mobility due to 802.11n, WiMax, LTE, etc
  • The explosion of interactive TV (through high definition video over IP) enabled by fiber to the home
  • The virtualization of the data center, including desktops
• The end of the global slowdown, re-invigorating world-wide growth of capital goods products, which are increasingly designed with digital devices like FPGAs