Good Times are Ahead for Fabless Companies

Article By : Nitin Dahad

At Silicon Catalyst semiconductor startup event at Williams Advanced Engineering, ex-Dialog CEO says good times ahead for fabless companies.

The next few years could be a good period for fabless semiconductor companies, especially with the expected growth in fab capacity meaning fabs will need to fill their production lines. That’s the view of seasoned electronics industry executive Jalal Bagherli, speaking at this week’s Silicon Catalyst semiconductor startup event at Williams Advanced Engineering in the U.K.

Bagherli, previously CEO of Dialog Semiconductor and now investor and board member at various companies, outlined the trends impacting the semiconductor industry, which center around four key areas: geopolitics, Covid-19, climate change, and the semiconductor down cycle. He said the various chips acts around the world are likely to result in over-capacity in the near future. As a result of this and the coming down cycle, he commented, “This means the fabless business model regains leverage. They [the fabs] will be desperate for your business, and silicon cost will go down.”

Since selling Dialog Semiconductor, Bagherli has been a prolific ‘commentator’ on key events and trends in the semiconductor industry. In addition to the geopolitical aspect of how the industry is being impacted, in his talk he offered his perspectives about changing technology trends and business models.

Jalal tech trends
Jalal Bagherli highlights some of the key technology trends impacting the semiconductor industry. (Image: Nitin Dahad)

Since the focus of the event was on startups, he also offered his advice to startups:

  • If you are fundraising, close as soon as possible and raise as much as you can – at least for a runway of 18 months before next funding round
  • Stay away from ‘bleeding edge’ digital products – differentiate away from this to have a higher chance of success with less funding
  • Focus on customer design-wins that will help create a demand pipeline for the next upturn which could be at least nine months away
  • Look at opportunities created by strategic insourcing by system houses – as companies bring chip design in house, they may not have all the expertise needed which creates custom opportunities for niche and mixed signal products to complement their own processors.

Bagherli is currently co-chair at Williams Advanced Engineering (WAE), an adviser to Silicon Catalyst in the U.K., chair of ATE test hardware firm PTSL (who just this week acquired Dallas, Texas-based ThinkMEMS and also last month closed a $30 million investment from Tikehau Capital), and an investor in Salience Labs. The WAE grounds, with its Formula 1 racing history, provided the backdrop to this latest in Silicon Catalyst’s series of “Forming, storming, norming & performing of semiconductor startups” events (the last one was held at Arm headquarters in Cambridge, U.K.).

It takes teamwork to get a new chip to market

The Silicon Catalyst event included some fascinating insight into Williams Advanced Engineering’s work on electrification and battery management, followed by presentations from startups Oxford RF Solutions, Salience Labs, and QPT.

Oxford RF Solutions
Kashiff Siddiq, founder & CEO of Oxford RF Solutions, talks about his startup’s next generation ADAS sensors, which could potentially reduce the number of sensors in the car. (Image: Nitin Dahad)
Salience Labs
Vaysh Kewada, co-founder & CEO of Salience Labs, gives an update on the company’s photonic solution for AI inference. (Image: Nitin Dahad)

We also heard the journey of PTSL, from kitchen worktop with no debt or equity and just £4k of founders’ capital, to finally raising external $30 million of funding this year for next phase growth.

PTSL
Jordan Mackellar, founder & CEO of Probe Test Solutions (PTSL), talked about his startup journey, including the use of a vacuum cleaner providing suction for the wafer on the kitchen top for its first test rig. (Image: Nitin Dahad)

In addition, the fund manager for WAE’s technology investment group, Foresight, also highlighted its work with deep tech startups, with which it gets involved at seed funding stage.

Joe Jones - Williams Advanced Engineering
Joe Jones, product manager for battery technologies at Williams Advanced Engineering, delivered a fascinating insight to the work on battery management, battery intelligence and battery digital twins that is helping the path to electrification in many industries. (Image: Nitin Dahad)

The event also presented the importance of the ecosystem and teamwork in getting a chip to market. Raspberry Pi’s chief operating officer, James Adams, talked about the work involved in developing its own microcontroller (MCU), the RP2040. He said, “Making chips is hard,” as he described how it took teamwork together with Arm and imec and three years to get from design to end product.

Raspberry PI making chips is hard
James Adams of Raspberry Pi talked about their journey to getting their own MCU to market, from design to production volume. (Image: Nitin Dahad)

He said, “We had a great bootstrap with Arm flexible access and imec. It’s been a team effort.” Presenting for Arm’s involvement in the development, Gabriella Giuffrida, Arm’s senior business manager for the flexible access program, said that doing the technology is “incredibly expensive” for a startup, so minimizing risk and providing access to the huge Arm ecosystem was important.

Arm Flexible access overview_c
Arm’s flexible access program starts free, and fees are introduced gradually as a startup goes through its funding stages. (Image: Nitin Dahad / data source: Arm presentation at Silicon Catalyst)
Arm flexible access_c
The Arm cores available under the Arm Flexible Access program. (Image: Nitin Dahad / Data source: Arm presentation at Silicon Catalyst)

Imec’s ASIC design manager, Paul Ovington, talked about its role in helping Raspberry Pi get its MCU to market through its Imec.IC-Link unit. He said, “We help fabless semiconductor companies get their product to market.” For Raspberry PI, they helped with the project management, packaging, test and qualification, tape-out support, and rapid production ramp.

James Adams highlighted the key learnings from their experience in getting the RP2040 out. He summarized it as follows:

  • Hiring in the right experience is important – both internal and external
  • Leverage external experience, especially in navigating chip design complexities
  • Leverage proven external IP, making sure not to reinvent the wheel but focus on your own unique selling point
  • Build the virtual team that you need

Serving the silicon renaissance

Established first in 2015 in the U.S. by Rick Lazansky, Mike Noonen, Dan Armbrust, and Tarun Verma, Silicon Catalyst says it is the world’s only incubator focused exclusively on accelerating semiconductor startups – including photonics, IP, MEMS, sensors, materials, and life science. Its model is providing support to startups through a network of in-kind and strategic partners to help dramatically reduce the cost and complexity of development. Silicon Catalyst supplies startups with a path to design tools, silicon devices, networking, access to funding, banking and marketing acumen to successfully launch and grow their companies’ novel technology solutions.

As Richard Curtin, managing partner at Silicon Catalyst in the U.S., reminded me on a call this week, “There is a silicon renaissance”, and he added that we should remind ourselves that semiconductors are the oxygen that allows software to breathe: a good reason for an incubator focused on silicon. The U.K. Silicon Catalyst chapter was launched last year with Sean Redmond as its managing partner.

 

This article was originally published on EE Times Europe.

Nitin Dahad is the Editor-in-Chief of embedded.com, and a correspondent for EE Times, and EE Times Europe. Since starting his career in the electronics industry in 1985, he’s had many different roles: from engineer to journalist, and from entrepreneur to startup mentor and government advisor. He was part of the startup team that launched 32-bit microprocessor company ARC International in the US in the late 1990s and took it public, and co-founder of The Chilli, which influenced much of the tech startup scene in the early 2000s. He’s also worked with many of the big names—including National Semiconductor, GEC Plessey Semiconductors, Dialog Semiconductor and Marconi Instruments.

 

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