Things difficult to produce high-margin semiconductor chip manufacturers to new model

Introduction: the semiconductor industry needs to think a to open source hardware, again chip programming and function as a service "Features-as-a-Service as the foundation of a new business model, can help to promote the growth of the next stage.

Semiconductor industry needs to think a to open source hardware, again chip programming and function as a service "Features-as-a-Service as the foundation of a new business model, can help to promote the growth of the next stage.

After half a century of continued growth and innovation, semiconductor sales and profits in the consumer trends, market momentum and the pace of innovation and other aspects of the beginning of a marked slowdown. If the industry is gradually losing its magic, the resulting series of the whole and also left a lot of exclamation marks.

According to the data of Gartner, a market research firm, in 2015 the global chip sales about US $333.7 billion, fell by 1.9%; prediction of World Semiconductor Trade Statistics (WSTS), 2016 is expected to see a rally to $34.1, slight growth of 1.4%. Meanwhile, Morgan Stanley (Stanley Morgan) pointed out that in 2015 the chip industry for the first time publicly listed (IPO) accounted for only 5% of all IPO of the U.S. technology industry, compared with ten years ago, has been a significant decline of 25%.

The rapid development of Internet of things (IoT) is expected to become the next big thing to revitalize the growth of the chip industry". However, in the current mode of chip development costs continue to rise as well as less and less profit, the Internet of things can not play its potential. Even if the Internet of things to meet optimistic forecasts, design and build as low as $1 sensor chip to monitor the temperature of the refrigerator or the city parking spaces and other applications, it can not produce much profit.

Semiconductor companies need to seriously explore how to change their business model. Specifically, they must be for commercial IP embrace open source hardware, the reprogramming of the chips, can help the to avoid mask costs continue to rise, and amplification chip sales and lucrative downstream earnings.

The success of open source software has opened an important precedent for the semiconductor industry. Face prohibitively expensive development costs, enterprises can choose from unnecessary spending, through greater emphasis on open source hardware IP function block (IP block) and the board, thereby creating a to serve as the leading source of revenue.

The heavy programming chip also brings a chance for the semiconductor industry to reduce development and manufacturing costs and create new sources of revenue. Chip manufacturers can sell a single configuration with minimal functionality, requires OEM or end users to pay for additional functionality without having to use a different chip version for each application. With the provision of "functionality that services" (FaaS) system architecture, can significantly expand each chip design can be targeted at the market, the same time is still in line with the requirements of customers.

Certainly, there are many different ways to build this new business model. However, for many chip manufacturers, to get more industry downstream revenue, it is clear that the real transformation of the beginning of change.

For decades, chip makers have already set up a pattern of thinking that companies and consumers using their chips are creating trillions of dollars. Chip makers, however, are unable to fully tap the potential of the growing ecosystem.

It can be determined that the semiconductor industry has been mostly focused on the hardware aspects of innovation and strive to ignore the development of software. Now, it's time for a change.