According to the Chinese calendar, it's the Year of the Boar. But 2007 promises not to be boring as great changes lie ahead in the digital space, driven by one underlying theme: If you can't beat 'em, join 'em.
ASIC and ASSP vendors will merge or work on technology jointly. Foundries will merge or share resources. FPGAs and DSPs are merging more system components, while intellectual-property (IP) providers look to merge functionality to make killer functions, especially in communications and video.
Cost is the force behind all of this merging. New foundries now cost over $5 billion, with that number increasing rapidly as fabs look ahead to 45-nm process technologies and 450-mm (18 in.) wafers. As these costs continue to skyrocket, fewer companies will be able to absorb them on their own.
Of course, the expense of new foundries is being passed on to all players. A new state-of-the-art ASIC costs around $20 million in non-recurring expenses (NRE) alone and is expected to hit $30 million by 2010. Thus, we're seeing functionality merged into killer functions in which entire blocks of IP are being created, such as complete video decoders.
ASICs/ASSPs The good news for ASICs and ASSPs is that revenues in both industries will continue upward. The bad news is that both will lose more market share to FPGAs, structured ASICs, and DSPs. There also will be fewer ASIC and ASSP design starts because, as mentioned, cross-market killer functions are proliferating. You'll see more system-on-a-chip (SoC) configurations as well.
As such, industry analysts are recommending ASIC and ASSP vendors seriously consider changing their value proposition and expect layoffs as part of cost-cutting measures. Meanwhile, the message from foundries is being delivered across the board: Take design for manufacturing (DFM) seriously or else. Designers should also learn to play well with others, since taking DFM seriously requires collaboration between all manufacturing partners. Lastly, look for about 80% of ASIC IP blocks to come from outside sources by 2008.
FPGAs And Structured ASICs If the semiconductor industry doesn't live up to analysts' expectations, no one will be able to blame FPGAs or structured ASICs. That's because both industries are expected to do well in 2007, with increases in both revenues and market shares.
The outlook is good because Xilinx currently has a 65-nm offering (Virtex-5), while Altera and eASIC will deliver 65-nm technology later this year. With millions of gates, more of the total system may be implemented using FPGAs and structured ASICs.
The prospect of crunching hundreds of multiplications per clock cycle much faster than a DSP has many engineers pondering whether to accept the tenfold increase in algorithm design time. It will be interesting to watch the DSP, FPGA, and massively parallel processor manufacturers battle it out this year and next for market share of applications involving several channels of high-speed data.
Memory This year will mark the beginning of the end for mainstream magnetic storage. All-solid-state devices will begin to replace their magnetic counterparts, starting with business laptops. Consequently, the role of magnetic storage will begin to shift this year to secondary storage for media like music and videos.
But only a very small percentage of laptops will be sold with no magnetic storage this year, as the price point gap will be very large. In the meantime, expect hybrid magnetic and flash hard drives to start to capture a significant portion of the market share this year and become almost ubiquitous by next year in PCs.
Microsoft Windows Vista, due later this month, will be the main driver in the use of hybrid devices. It includes new technologies that take advantage of a hybrid configuration. Rich media will continue to be the dominant factor in driving the capacity of magnetic storage across all storage market segments.
Also, look for flash and DRAM to have a stellar year as consumers gobble up gaming consoles and upgrade their PCs for use with Vista.
DSPs DSPs are getting good at handling tasks like multimedia distribution, power control, and motor control. Their dramatic increase in use among these areas can be attributed to now-standard features like Ethernet and Serial RapidIO, which let them communicate better with each other and with other devices.
Adding multiple cores also makes tackling tasks in parallel a snap. Furthermore, DSPs are becoming more attractive and their architectures more operating-system friendly, while power consumption and prices drop.
Digital Video Just around the corner, 2009 will see the beginning of required high-definition broadcasts in the U.S. This mandate and the significant increases in video quality and some nice price breaks mean that 76 million Americans will be HD ready or viewing HD by the end of 2007. Also, don't forget the heavyweight bouts between LCD and plasma displays and HD DVD and Blu-ray. After that, look for holographic data storage to steal market share from whichever technology wins the next-generation DVD battle.
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