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Chip Design Presentation
Chip Design Presentation
Chip Design Presentation
Semiconductor Industry
The leading industry in the IT revolution.
Has significant influence on global economic cycles
Relevant to almost all sectors of IT.
Annual revenues of more then $150 billion, with average
year to year growth of 17%.
Fablees History
began becoming relevant in the 70s.
rapid growth in 90s
Today, the fabless companies total annual revenues
are more then $23 million which represent 15% of
semiconductor annual revenues.
for the last decade fabless growth rates were higher
then the semiconductor growth rates and it is expected
that in 2010 fabless annual revenues will represent
about 50% of the semiconductors revenues.
Fabless Statistics
Fabless Companies Primary Business by Market Sector
Market Sector/Application
Percentage
Wired Communication
31%
Wireless Communication
23%
PC Peripherals
17%
Consumer
14%
PC
10%
Industrial Medical
2%
Defense Industries
2%
Automotives
1%
Fabless Statistics
Fabless Companies Primary Business by technology
Technology Area
Percentage
Analog/Digital
Logic
Microprocessors
DSP
Memory
37%
21%
18%
17%
7%
Fabless Statistics
Fabless Companies Geographic distribution
Geographic area of Fabless
companies
North America
Europe
Asia
Israel
84% / 455
7% / 55
5% / 75
4% / 30
Fabless Statistics
Geographic Distribution of Foundries serving Fabless Companies
Percentage
TSMC - Taiwan
UMC - Taiwan
Chartered semi - US
American Microsystems - US
Other - worldwide
41%
24%
10%
7%
18%
Israeli Statistics
chip design and semiconductor is the most important sector in the Israeli
Hi-tech.
In 2000, more then quarter of the M&A deals in the Israeli Hi-tech were
related to semiconductors and chip design.
In 2000, Galileo was acquired by Marwell for $2.7B and Visiontech was
acquired by Broadcom for $700M.
In 1999, DSPC was acquired by Intel for $1.6B and Libit was acquired by
TI for $465M.
Today, there are at least 3 semiconductor startups among the top 10
private startup in Israel (Saifun, Mobilian, Ezchip).
Methodology
Background.
Initial Mapping of the Israeli chip design companies.
Deep research on 15 chip design startup companies.
Interviews with most of these startup companies.
Analyzing the sample results.
Building an Initial Growth Model.
Initial policy implications.
Understanding the fundamentals of Italy chip design sector and adjusting
the model to Italy.
Increasing the sample - checking and expanding the growth model.
Policy Implications.
Entrepreneur Background
Very strong educational background (10 PhD, 3 M.Sc EE and 2 B.Sc EE).
Strong Work experience background (7 MNE, 5 SU, 3 IDF, 4 Academia).
Strong managerial experience (7 manager positions, 2 entrepreneurs).
Strong core additional team (5 very strong, 5 strong).
Strong R&D position experience (15 R&D positions).
Business Model
The technology innovation: 5 specific products, 6 platform technology
and 4 radical technology.
Becoming more focus in areas of development: 6 more focus, 6 no
change and 3 broadened.
Marketing model: 5 direct sales, 6 OEMs and 8 strategic and marketing
partnerships.
Growth Profiles: 2 IPO and M&A, 2 IPO, 2 fast M&A, 1 M&A as last
rescue and 8 not clear yet.
Path 4
Fast M&A
Path 3
IPO
IPO
Path 2
M&A
Path 1
Research Summary
We believe that most companies that dont suit the growth profile have
small chances of becoming successful companies in the chip design sector.
Most of the startups that suit the model fit into it sooner or later. We
identified between seven to ten companies in our sample that fit this model,
and five of these were already successful (between moderate success and
tremendous success).
We believe that in most cases our model can be helpful to policy makers in
choosing an appropriate policy/program to use in order to promote chip
design companies and the successful growth of the chip design sector.
We also believe that this model can be helpful to venture capitalists as a
checklist prior to any investment in this sector. Moreover, this model can
help the entrepreneur to decide whether they are ready to establish their
own startup.