Dynamic Duo Still Dominate Programmable Logic

By Howard Baldwin -- Movers & Shakers, 6/22/2006

It was a wild ride in 2005 for the programmable-logic device (PLD) market. Some companies in the segment lost money even as the overall semiconductor market was growing. A few lucky ones in the top five increased revenues, but only by single digits. Xilinx retained its position at the top of the heap, with $1.6 billion, even though longtime competitor Altera, with revenues of $1 billion, outpaced its growth rate, 7.6 percent to 3.7 percent.

There's a big drop-off after those two, which represent 83.5 percent of the PLD market, according to iSuppli. The others in the top five—Lattice Semiconductor, Actel and QuickLogic—constitute only another 13 percent of the market.

There were bright spots,of course—the competing technology called structured ASICs said to combine the best features of ASIC and FPGAs lost one of its stalwarts: LSI Logic announced that it was ending what it called its "platform ASIC" development, as part of new CEO Abhi Talwalkar's reorganization of the company.

PLDs seem to have vanquished structured ASICs, simply by catching up to them. PLDs can now offer the part-standard, part-customized capability that made the concept of structured ASICs so compelling. "Look at what all the leading vendors are doing in terms of IP," says Jordan Selburn, principal analyst in iSuppli's Core Silicon group. "It's not just 'Here are 500,000 gates; go have fun developing something,'" he says. "They're still selling standard products, but they're making them a better fit for someone who wants a custom solution." The top vendors are giving customers options in terms of digital signal processing capability and even processors themselves.

For Selburn, though, the structured ASIC market remains "a very interesting can of worms," one with more questions than answers. He's not sure LSI's departure from the market is a reflection more of structured ASICs or of LSI's shift. But he notes that in the fourth quarter, he saw the revenues flattening for Altera's HardCopy technology, which he puts into the structured ASIC category.

Add to that, says Selburn, the possibility that structured ASICs aren't getting the same advantages from advances in process technology as other devices—especially PLDs. "As Moore's Law marches ahead, it helps other kinds of semiconductors," he says. "PLDs continue to get smaller, which is important for them, and faster, which opens up new applications, and their power needs are getting lower." Wim Roelandts, CEO of Xilinx, confirms the boost: "At 150 nanometers, we got order rates of 100,000 per year. With 90-nanometer technology, we're getting 1 million units per year regularly. At 65 nanometers, it'll be three million per year. With every generation, we become more competitive." (For more about Roelandts, see the Industry Insights Q&A, page 74.)

Some analysts are even more optimistic about growth in the PLD space, with even some of the smaller companies on the revenue list growing. "There are still opportunities in this space for new companies," says Jerry Worchel, semiconductor analyst for In-Stat (a division of Reed Electronics' parent company), citing QuickLogic's success with its QuickRAM and QuickMPU capabilities and Actel's success with military applications.

But the real opportunities for PLDs, analysts insist, are in consumer devices. "It's an open runway," says Worchel, "because we're putting more complexity into consumer electronics, but we've got all these standards to deal with." The best example is in cell phones, but the same capabilities affect all manner of consumer electronics. "If you can put a low-end FPGA into a phone and reconfigure it on the fly to go from the U.S. to Europe to Japan without forcing someone to buy a new phone, that makes it nice from the standpoint of inventory."

Worchel even postulates that manufacturers that know they're going to sell millions of devices, including game consoles such as the Xbox, will do initial development with FPGAs. Why? "Because they can get all the bugs out of the devices when it's cheaper."

Howard Baldwin is former executive editor of Electronic Business.