Factors Contributing to the Development of the SIP Mall

Initially, in the SIP industry, only a few companies, such as ARM and MIPS, specifically designed SIPs and licensed them for royalties or a lump sum as their major source of income. Now, the roles of the major players in the SIP industry have been extended to the whole supply chain of the semiconductor industry and successfully pioneered a networked model based on licensing markets. To better support the needs and requirements of customers, SIP companies, such as VCX and Reusable Application-Specific Intellectual Property Developers (RAPID), have created well-established technology alliances with partner companies. These alliances benefit customers by providing access to more complete solutions, accelerating design time, and improving the ease of manufacturing. These platform alliances help to unify a vision for the semiconductor industry and the technical standards required to enable the most critical component of the vision—the mixing and matching of SIPs from multiple sources. The business models of these allied companies familiarize customers with the third-party one-stop service platform the SIP Mall provides.

Some industry consortia, consisting of representatives from the systems, semiconductor, SIP, and Electronic-Design-Automation (EDA) segments of the

industry, have also worked for the development of chip design. These consortia are industry bodies focused on the definition and adoption of SIP technical standards and interfaces 1 and educational initiatives for the design community. Companies which utilize SIPs for faster entry into the market, usually license the needed SIP from these individual companies based on the information and standards specified by these consortia. Information about SIP development can be also obtained by monitoring the progress of industry consortia, standard bodies, initiatives and working groups active in SIP issues, such as Hard SIP quality, SIP portability, business models, licensing and other topics for current or future needs [75, 76]. The open standards and specifications created by these consortia also facilitate the integration of SIPs from multiple sources for the SIP Mall and its customers. Additionally, support from the government will also enforce the growth of the SIP market and the services provided by SIP Malls.

Semiconductor manufacturing has become a global enterprise. An SIP Mall would connect SIP designers and users in various locations of the global market and provide them with a chance to enforce the competition of design companies and the semiconductor industry in the country to which they belong. The growing market of the SIP industry attracts the involvement of foundries and governments to look for opportunities to purchase or license SIPs for chip design.11 Many countries, including Japan, South Korea, France, Scotland, and Taiwan, have rolled out SIP Mall programs

[19]. The experience and technological capabilities provided by the foundries, and the institutional, technological, and competitive environment of the country, will influence foreign investment decisions [77]. The smaller firms and start-ups have allied to take advantage of perceived opportunities [73] and the government policies can facilitate the initial market entry of SMEs and promote continual upgrades and creation of knowledge [78, 79]. The resources from the government will help the companies which are inclined to join the burgeoning SIP industry to bear more risk in the initial stages of development.

2.3.3. Issues Faced by SIP Malls

In the process of chip design, from clarifying the functional specifications of the requirements to verifying the functions of the chips, it is found to be difficult for designers to incorporate SIPs into a single design because companies have different SIP

design specification requirements. Chip design, especially in future SOC design, will contain several reused functional blocks from internal and external sources. SIPs with certain functionalities from different providers are more easily integrated into a product if a standard has been developed.

The Virtual Socket Interface Alliance (VSIA) is the primary organization developing standards to enhance the productivity of chip design. However, VSIA does not develop standards relating to the internal design of SIPs, functional architecture of subsystem components, fabrication processes, and techniques for EDA tools. Most SIP providers license configurable and preconfigured SIP solutions that enable their customers to design products, but lack standards for the processes of testing and verifying components. The SIP provider’s licensable technology is usually focused on a specific architecture to dominate the specific application markets. To make an SIP standard architecture, a vast ecosystem of companies must support the SIP provider, but it is difficult for SMEs and new companies entering the market to attract powerful players’ support to create a new standard architecture because the players dominate the technology and market.

SIP providers and users also meet with more difficult integration situations in the trading environment. Legal provisions[80, 81], application platform development, SIP development, and other services related to the trading procedure [82] should also be considered before SIP trading. Significant Internet-related obstacles, including SIP ownership conflicts, design support disputes that reflect interdependencies among individual design blocks, and disagreements over pricing and royalties [83] also should be considered. Currently, most contracts are negotiated, signed and completed only between the licensor and the licensee. A design that incorporates multiple SIP products may involve several SIP providers and more than one source of manufacturing. As a result, SIP users have to manage multiple providers in the supply chain, each with different business models and technical capabilities. Even though the SIP business models tend to be more complex, an intermediary, or agent such as the SIP Mall, does not play a major role in the process. The situations make customers consider outsourcing jobs to an agent, but make them doubt that the SIP Mall can resolve these problems.

Although the growing market of the SIP industry attracts the involvement of

foundries and governments^† to search for opportunities to purchase or licence SIPs for chip design, the primary concern for an SIP Mall is how to attract SIP providers and SIP users. While SIP Mall founders must determine which services are most conducive to operating an attractive SIP Mall, these issues have rarely been studied. In this research, we interviewed chief-executive officers, senior technical personnel, and marketing managers from twenty-four SIP licensee and licensor companies to determine which services (customer’s needs) were required for establishing a successful SIP Mall. The SIP Mall is designed to provide the services needed for SIP providers and SIP users to reduce the time, risk and cost of chip design, and to allow chip design companies to have sufficient and reliable key components for marching into the worldwide chip design market. Taiwan is the world’s largest semiconductor foundry and second largest fabless IC design provider. To maintain the leading position, competitiveness and the value added of Taiwan’s foundry, fabless, and thus the IC industry in the SOC era, the Taiwanese government stepped in. The Si-Soft Project [84], launched by the Taiwan government in 2000, was aimed at enhancing Taiwan’s capabilities in (1) innovative SOC product designs; (2) silicon SIP development; (3) EDA flow integration; (4) SIP Malls; and (5) SOC design services. Even though the Taiwanese government has exerted considerable effort into developing the SIP and SIP Mall industries over years, Taiwanese SIP Malls are still in their exploratory phase. SIP sources are limited and few SIP transactions are made. As can be seen, users and providers in the SIP industry still experience the difficulties of this maturation.

Although the functions of the SIP Mall are helpful for customers and could accelerate the growth of the SIP market, there are still some obstacles for the development of the SIP Mall. An important issue for an SIP Mall is how to attract SIP providers and SIP users to trade it.

†Exchange (VCX) Software Ltd. was established and funded by the Scottish government, Unichip, and Faraday Technology and were established by the TSMC (Taiwan Semiconductor Manufacturing Co. Ltd.) and UMC (United Microelectronics Corporation) foundries. The China Software and Integrated Circuit Public Service Platform (CSIP) were set up by the People's Republic of China government (http://www.csip.cn). Chartered, a Singapore foundry, collaborates with the VCX to provide SIP licensing business.