Rather than a typical industry downturn, I believe that we may have undergone a fundamental shift in the way that electronic products are produced and consumed. People are much more conservative when purchasing electronics, and the Internet has made it possible for them to perform detailed research and product comparisons. Features that used to be considered advanced have become fundamental product requirements. The result of this is that design teams are significantly smaller than they once were, but the schedules to create innovative, competitive products has become increasingly aggressive.

One critical requirement for operating under this new design paradigm is through design reuse policies and the purchase and use of high-end intellectual property. Although these concepts have been around for several years, we are only now experiencing real acceptance and adoption of reuse and IP integration. While most of the semiconductor industry has been staying flat or declining, the third-party IP industry has seen license revenues grow substantially. It is possible for companies to delay their tools purchases, but fundamental product features may not be excluded from any design. IP represents a cost-effective route to implementing this functionality, while freeing up the design team to focus on differentiation.

IP are pre-built and verified blocks of logic that can be utilized in an ASIC or FPGA. IP typically falls within three major categories; CPUs and DSPs (often called star IP), standards-based IP (such as USB, Ethernet, etc.) and library blocks. All three categories have seen increased market growth during this downturn as, increasingly, companies determine that it is more expensive to design, test and verify their own solution than to purchase it.

At the same time that demand for reusable IP is growing, economic pressures are forcing IP suppliers to consolidate. The smaller providers are finding it necessary to combine with larger organizations that can afford the sales and support network required to market IP on a worldwide basis. We see major electronics companies combining with the CPU and DSP providers. The foundries have built strong relationships with the major library IP providers, and standards-based IP has been consolidating into the EDA companies.

What will the future hold? We are already seeing an increase in the amount of design starts that are incorporating reusable IP. I believe that this is just the beginning of an exciting new paradigm. Already, the economy is showing signs of improvement, and with it comes an increased demand for design reuse. It is an exciting time for our industry, and I am excited to be a part of it!