SIP Business and Strategy

1
SIP Business and Strategy
???DSP ??????LSI Logic
2
Table of Contents

• What is SIP?
• The Market of SIP
• SIP Business and Strategy
• Conclusion

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Flow of Product Development
Product Definition and Market
4
Product Definition and Market
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An Example Product
PMP (Portable Multimedia Player)

• Storage
• 40GB HD CompactFlash I/II SD/MMC
• Display
• Screen Size 3.8
• VGA 640x480x3 (RGB)
• Connectivity
• USB 2.0, Ethernet, WiFi, Bluetooth
• System Support
• Windows 98/ME/2000/XP
• Mac OS 9.1 or later

• Basic Functionality
• Audio MP3 AAC
• Movies AVI MPEG4 up to 30fps_at_VGA
• Stills JPEG RAW
• Audio/Video Out
• Mono dynamic speaker
• Stereo 3.5mm headphone jack
• Audio/Video out jack
• PAL and NTSC supported

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Functional Description
PMP Chip
Card
Memory Card Flash Card
Program ROM
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IP-Based SoC
Customer Logics
CPU
SRAM
SCU
PLL
RTC
GPIO
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IP Category

• Memory IP
• ROM
• SRAM
• Integrated IP
• Platform IP
• Analog and Mixed Signal
• A/D and D/A
• Audio Codec
• PLL, OSC, .

• Processors/Companion Controller
• CPU
• DSP
• MCU
• Multimedia
• JPEG
• MPEG
• Interface and Peripheral Cores
• Interface GPIO, PCI, Serial ATA
• Receiver/Transmitter LVDS, RSDS, UART
• USB controller and PHY

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2001-2009 Worldwide IP Market
iSuppli, September 2005
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2001-2009 Worldwide IP Market
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Top 10 Worldwide IP Providers
Garnet Dataquest, August 2005
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Difficulties of IP Business

• IP is on the top of semiconductor food chain
• It is hard to foresee what will happen after two
  years.
• IP Development is not an easy task
• Bluetooth specification 1500 pages
• To ensure the correctness of an IP is not easy
• IP verification
• Too many variations of the application
• Demo of the IP is not easy

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SIP Business
Promotion
Engagement
Business Negotiation
Delivery Support
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Promotion

• Website
• Design and Reuse (www.us.design-reuse.com)
• LSI Logic ZSP (www.zsp.com)
• Show Events
• EDAT - Taiwan
• FSA Suppliers Expo
• Technical Forum
• Partnership
• Door-to-Door Visit

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Design and Reuse (www.us.design-reuse.com)
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LSI Logic ZSP (www.zsp.com)
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Engagement

• Objectives
• Understand what customer needs
• Promote the right product
• Activities
• Presentation and demo
• Technical evaluation
• Buyers
• Technical buyers
• Business buyers

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What Customers Always Ask . . .

• Customers always ask for solutions, not
  technology
• Customers always ask for a solution to cover all
  products
• Customers always ask for reference
• Customers always ask for competitive analysis
• Customers always ask for trial-run
• Test chips, software, boards,

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Revenue Type

• NRE (Non-Recurring Expenses) License Fee
• One time
• Royalty
• Per chip or per core

• Service
• Maintenance yearly or quarterly
• Supporting based on support needed
• Customization by request

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Payments

• License fee take 250K as an example
• 100,000 on effective data of the contract
• 100,000 six months after the effective date of
  the agreement
• 50,000 twelve months after the effective date of
  the agreement
• Royalty

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Some Facts . . .

• Customer always thinks that the price is too high
• License Fee and Royalty
• Large-scale design houses
• Multiple licenses
• Not willing to pay royalty
• Ceiling of royalty
• Small-scale or start-up design houses
• Not willing to pay high license fee
• Amortize the license fee onto chip price
• Refund after certain volume

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Some Facts . . .

• Royalty
• Percentage or fixed number
• Minimum royalty
• Royalty rate not be less than 0.3 per core unit
• Maintenance and Supporting Fees
• Some definitions
• Any bug-fixes or corrections to the IP and
  documents
• Updates to the IP and documents
• Telephone and written consultation
• Most difficult to collect

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Delivery and Support

• Contract
• Hardcore or Softcore
• Security
• Collection of royalty

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Conclusions

• Trends encourage IP-based design.
• Many high-volume markets are stanards-driven
• Wireless
• Multimedia
• Networking
• IP business is on the top of semiconductor food
  chain
• IP Business is fun but very competitive