Actel's East on growth, differentiation

Electronics Weekly in the UK just published an interview with Actel Corp. CEO John East, in which the company founder looks at growth opportunities in the semiconductor market at large, in FPGAs in particular, and in the specific target markets for SRAM-based, flash-based, and special-purpose FPGAs. Most of his conclusions bear the thoughtful insight you would expect from an executive with East’s experience. If I’d quibble with any points, it’s that FPGA vendors had better look for logic replacement opportunities, because core growth in any OEM markets after a recession like this may be long in coming.

East’s quote of the week comes in talking about the FPGA opportunity in datapath telecommunications applications becoming a victim of its own success. “How do you a good encore after the concert was that good?” he asks. Based on the infrastructure predictions I’ve seen lately, you don’t. The telecom equipment OEM industry may boil down to Cisco, Huawei, and one or two other OEMs, and the opportunity here may have permanently passed.

East sees the flash-based FPGA opportunity in the wireless client market as a target that is just at the forefront of being plumbed, and I agree. Once the onrush of smartphones, smartbooks, netbooks, netnotes, what have you, hit the market, FPGAs can sweep up most graphic and communication functions in the name of saving power.

Actel has always had a special interest in medical, mil-aero, and industrial accounts, and East mentions the continuing opportunity there. He’s right, to a point, but he also should listen to what people at VITA, PICMG, and other organizations are saying about the shaky state of such markets.

Obviously, the growth opportunity in Asian markets remains huge, with wireless, enterprise infrastructure, and industrial leading the way. All major FPGA vendors still see automotive as important as well, though Detroit’s role in the 21^st century automotive market is iffy. What if the automotive vertical market becomes an all-Asia regional market?  As long as no strong Asia-based FPGA players emerge, and the US-based majors can take advantage of design integration, their own futures are assured.

So yes, the future of the FPGA industry on its own is bright. Where I’m more skeptical than East is in predicting a very bright future for the semiconductor industry at large. Even taking into account Asia growth, even taking into account boom markets like smartphones, this particular recession has taken some wind out of the sails of hardware innovation in general. There is always a replacement and upgrade market for general-purpose mixed-signal or digital-logic devices, but the semiconductor industry may not be salvageable at its present size. And the next-generation semiconductor industry may indeed be led by FPGA players.