The specialist IP based electronic system conference and mini exhibition IP08 put on a brave face in Grenoble last month. Numbers were down, but quality was high, said event organiser Gabriele Saucier, ceo of Design & Reuse.
Unusually, the regular market trends and forecasting slot took a different slant this year. “I’m not making any predictions,” announced Jim Tully, vice president and distinguished analyst with Gartner. “The current business climate makes long term forecasting meaningless. People are wholly focused on the short term; surviving the next six months,” he said.
However, he provided a snapshot of activity in 2008. While the overall semiconductor ic sector showed an annual growth of around 7.5%, various subsets of the IP market grew dramatically. Included in these were dsp cores (21%), fixed function dsps (16%) and analogue (22.4%). Microprocessor cores – by far the largest market segment – grew at a respectable 6.2% in 2008. Noticeable trends include a continuing decline in the number of asic/assp design starts (though volume and complexity are increasing) and a significant rise – not seen before, according to Tully – in the number of mpu based fpga designs.
Tully did not hold back: “I’ve seen major companies tear up three business plans in as many months. Markets including China and India are not decoupled from this crisis. There is a global decline.” We will see projects cancelled, wholesale restructuring, cost cutting, and many job cuts, Tully warned: “And at least 10% of these jobs will never come back,” he continued. “Look at the mega trends: slowing long term growth in the semiconductor market, chip prices are falling too fast for profit, chip costs are rising.”
Yet, Tully went on to predict that this downturn will end, probably around Q3/Q4 next year. The ic design services sector will recover first and quickly, he said. Chip design activity will start to increase prior to a more general market recovery.
Tully outlined a vision of transformation triggered by this recession. “The web is transforming many industries,” he said. This could set a trend towards the service provider business model, encouraging shared resources, mass collaboration, distributed design services and ‘pay per use’ schemes in cloud computing environments with common access to tools, design resources, and IP. “Companies want to take assets off their books and lower the cost of design,” Tully concluded.
