T.J. Rodgers and the Rise of System-On-Chip

Cypress Semiconductor announced that they have sold over a billion of their PSOC (Programmable System on a Chip) family devices since 2002.  When you’ve sold a billion devices it’s not a niche product anymore.  Kudos to T.J. Rodgers and the folks at Cypress Semiconductor for delivering a great product.  We’ve been using their stuff for a wireless temperature sensing application in our lab and it works great.

Cypress’ PSOC family  is one example of how programmable hardware devices are changing the way embedded systems are designed.  There a variety semiconductor vendors offering devices that illustrate this trend, each targeting different parts of the embedded electronics market.  Offerings range from lower-end processors  combined with a relatively small number of  digital logic cells and analog functionality (PSOC) to devices with huge numbers of digital logic cells combined with high-end processors capable of running Linux (Xilinx’s Zynq).

The value proposition of programmable system on a chip devices encompasses reducing a product’s bill of materials through greater integration and enabling product differentiation through cost effective customization.  For many years products in the embedded industry used ASICs to reduce component count and allow customization.  As ASIC process nodes have shrunk the costs of developing an ASIC have skyrocketed and the number of new ASIC design starts has fallen steadily.  The reason is economics.  ASIC design at the leading edge of semiconductor process technology is very expensive.  ASIC development costs can run upwards of $40 million.  If we use a typical business model where around 20% of revenue is spent on R&D a chip costing $40 million must bring in around $200 million in revenue.  If we are lucky enough to own 50% of  the market for our device that means the total market is worth $400 million.  Outside of products like PCs, cell phones, and game consoles there aren’t a lot of markets that big.   Contrast that to a programmable chip, which is expensive to develop, but once developed can be programmed to serve many different markets.  The economics mean that  programmable technologies will continue to see increasing adoption while fixed function devices, such as ASICs and Application Specific Standard Processors (ASSPs), will see less.  In our next post we’ll talk a bit about product customization and managing complexity.

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