SOC devices spur ASIC market
08/01/2000
The application specific IC (ASIC) industry has received a great deal of attention over the past few years (probably second only to the highly volatile DRAM market). Much of this attention has been focused on so-called system-on-a-chip (SOC) devices that are primarily implemented using standard cell ASIC methodologies. However, the surging programmable logic device (PLD) and rapidly declining gate array segments are also interesting ASIC industry trends.
ASIC market trends
One of the key elements that separates ASIC devices from standard IC products is the "specific customer" nature of ASICs. Even PLDs, which are initially sold as off-the-shelf devices, are eventually programmed to contain a customer-specific circuit design.
In general, the more customer-specific and flexible the ASIC, the more expensive it is. The ASIC user is continually striving to satisfy system performance needs while staying within budget constraints. For SOC users, this is becoming increasingly difficult.
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The gate array segment of the ASIC market is being attacked from both the low and high end. With major foundries (e.g., TSMC, UMC, etc.) using their leading-edge processes to produce MOS PLDs, devices with up to 100,000 gates are becoming an economical alternative (especially when time-to-market is considered) for many "low-end" gate array users. At the same time, most high-end users require more than just logic gates from their ASICs. The ability of cell-based ASICs to incorporate leading-edge cores (e.g., DSPs, MCUs, DRAM, etc.) more easily has eliminated gate arrays from consideration for many high-density designs.
Overall, then, the ASIC industry is composed of numerous subsegments of different product types that are not typically moving in concert with regard to technology or market trends. Therefore, although the market is often discussed in total, in order to develop a more accurate picture of this part of the IC industry, it is beneficial to analyze each product type individually. Figure 1 segments the $23.1 billion 1999 MOS logic IC market by product type.
 Figure 2. Total ASIC market (1994-2004). |
As shown, the major ASIC device types (i.e., standard cells, gate arrays, and PLDs) represented 55% of the total MOS logic market. The general-purpose logic category is synonymous with standard logic (e.g., series 4000, 74HC, 74HCT, etc.). The special-purpose logic category includes application-specific logic devices (i.e., ASSPs), full custom ASICs, and MOS display drivers.
Figure 2 shows that the total ASIC market was not immune to the IC industry downturn that occurred in 1998. In fact, the ASIC segment declined more than the total IC industry in 1998 (-13% vs. -9%). Before the 1998 decline, the ASIC market grew faster than the overall IC industry in 1997 and 1996 (slightly better results in 1997 and much stronger results in 1996).
In 1999, the total ASIC market increased slightly less than the total IC industry (16% as compared to 19%). A 16% CAGR is forecast for 1999 through 2004. IC Insights expects the worldwide 2004 ASIC market to reach about $33 billion, just over double the 1999 ASIC market level.
ASIC market forecast by product
MOS gate arrays, MOS PLDs, and MOS standard cell devices represented 81% of the total ASIC market in 1999, up from 71% in 1994. In 2004, it is forecast that these three categories will hold 89% of the total ASIC market.
Although the standard cell market barely edged out the gate array market in 1996, the standard cell segment was almost three times the size of the gate array segment in 1999! In 2004, the standard cell market is forecast to be almost three times the size of the next largest ASIC market — MOS PLDs.
The high-growth ASIC markets of the early 1990s, MOS PLDs and MOS standard cells, are also forecast to be the high-growth segments of the ASIC market through 2004. Bipolar ASICs are forecast to continue their swift decline in market size through 2004. Overall, the total ASIC market is forecast to grow slightly higher on average than the total IC industry.
The MOS standard cell market
One of the IC product segments that did not suffer a downturn after 1995 was the standard cell market. With a 38% increase, the cell-based IC segment displayed the second largest growth rate of the major IC segments in 1996 (just under the 40% growth of flash memory). In 1997, the standard cell market was the fastest growing segment of the major IC product types. In 1998, the cell-based ASIC market displayed a 15% decline. However, it rebounded and increased 35% in 1999 (to $7.3 billion).
 Figure 3. SOC cell-based IC market (1997-2004). |
In many applications where leading-edge performance is not required, embedded DRAM (eDRAM) will be used in place of the less area-efficient SRAM cells. IC Insights believes that eDRAM devices will represent almost 29% of the $21 billion 2004 standard cell market. Assuming the 2004 eDRAM standard cell market reaches $6.0 billion, the 1999-2004 CAGR would be 61%. Since the 1999 standard cell market was $7.3 billion, a $6.0 billion eDRAM ASIC market in 2004 is sure to attract attention.
Most ASIC vendors define SOC devices as ICs that have more than 100,000 usable gates, on-chip memory, and some type of microcomponent function (i.e., MPU, MCU, or DSP) on-board. (Many SOC ASICs also include analog circuitry.) The bulk of ASIC SOC production will be accomplished using cell-based design techniques. Figure 3 shows IC Insights' forecast for the SOC cell-based ASIC market.
As shown, the SOC standard cell market is forecast to represent 84% of the total cell-based market in 2004, more than twice the 38% share held in 1999. IC Insights forecasts that eDRAM cell-based ASICs will represent about one-third of the SOC market in 2004. It is interesting to note that some ASIC companies have estimated this figure as high as 50%.
In the long term, IC Insights believes that the cell-based IC market will be dominated by the top six or seven companies. As the barriers to entry become steeper (i.e., advanced processing technology, CAD tools, packaging and testing expertise, etc.), only a few companies will offer the entire "solution" that the cell-based ASIC customer requires.
Top ten ASIC suppliers
The top ten ASIC suppliers for 1999 are shown in the table, which lists six US companies, three Japanese companies, and one European company — Philips — a result of its acquisition of VLSI Technology in mid-1999. All of the companies, except PLD suppliers Xilinx and Altera, are emphasizing their cell-based product lines.
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The big story in 1999 was that IBM, which made a concerted effort to target the cell-based ASIC market, moved into the number one spot in the top ten ASIC ranking. Beginning in 1998, IBM's emphasis was almost entirely focused on the cell-based ASIC industry as the company began phasing out gate array production.
Only about 45% of IBM's ASIC sales in 1999 were to the merchant market (IC Insights expects the merchant portion of IBM's sales to be more than 50% in the year 2000).
With the inclusion of Symbios' sales into the LSI Logic figures beginning in 1998, LSI Logic was the largest "merchant market" ASIC producer in both 1998 and 1999.
In 1999, Japanese companies rebounded in ASIC sales after a disastrous 1998. The strong yen also helped boost Japanese ASIC sales when reported in US dollars.
Bill McClean is president of IC Insights Inc. For further information about The McClean Report — An In-Depth Review and Forecast of the Integrated Circuit Industry, contact him at 13901 N. 73rd St., Scottsdale, AZ 85260; ph 480/348-1133, fax 480/348-9745, e-mail [email protected], www.icinsights.com.