Semiconductor innovation accelerates

The Australian Microelectronics Network (AMN), a group of about 200 researchers, engineers and academics, is finalising details of an agreement to become a Strategic Regional Partner of Scotland's Virtual Component Exchange (VCX). If it goes ahead, the deal will improve Australia's access to ground-breaking semiconductor technologies from across the globe.

AMN's executive chair, Sydney University professor of electrical and information engineering Trevor Cole, said VCX, an online marketing channel for buyers and sellers of semiconductor IP licensing, would enable AMN to bring tools and expertise to Australian businesses wishing to harness semiconductor technologies patented or copyrighted elsewhere.

“Australia is a very small place in a big world and to say that we should be able to create everything from scratch in Australia is ludicrous,” he said. “To build on the work done by others, to more quickly get product to market ... via inward licensing of IP is something I have been screaming about for a long time.”

Cole said there was “great interest” in the time-and-money-saving VCX proposal from Australian industry and cooperative research efforts. Meanwhile, the contribution of microelectronics to all industries was rapidly increasing. “It's becoming more and more obvious that this is the way to move forward,” Cole said.

AMN trotted out Andy Travers, the Scotland-based CEO of Virtual Component Exchange, to give a keynote address at Adelaide's Technology Futures conference on 16 May. Travers said the international supply chain for semiconductor IP licensing has been plagued by quality control and business model problems that devour company funding, time and other resources.

“Previously, if you wanted to find a semiconductor technology for your needs you might go to Google and come up with some little company in Iceland or Kazakhstan or wherever. Then your salespeople'd contact that company and ... it was all very difficult and took a long time,” he said. “And then you'd find the thing didn't work anyway.”

Travers said that, previously, finding, evaluating and licensing one piece of semiconductor IP could take up to six months and cost $US 190,000. Some 20 per cent of technologies licensed would later be found not to meet the company's needs.

He said IP vendors using VCX must profile their IP in a consistent manner, putting information for prospective licensees in one spot to help them choose the right technology. Buyers can also download licensing agreements from the site.

“There's a few other IP exchanges in the world, mainly more general or in things like biotech. But the problem with general IP exchanges is they don't deliver as much specialised information,” Travers said. “[However] in 20-50 years, IP exchanges will become commonplace.”

He pointed out that semiconductor IP vendors must adhere to certain rules and pay a fee to be listed on the exchange. VCX reviews the technologies and adds them to its storehouse of information, enabling buyers to compare IP available around the globe.

“The whole industry is in agreement that it needs a very good IP supply business yet the whole industry hadn't worked out the IP supply chain properly,” Travers said.

He said Dataquest research suggested the global third-party semiconductor IP market was growing fast, from $US 982 million in revenue in 2002 to an expected $US 1.9 billion in revenue by 2005. The entire semiconductor market was expected to grow from $US 154 billion to $US 254 billion in that period.

Travers said foundries everywhere were “desperate” to harness design productivity to increase production and lift revenue. Meanwhile, systems harnessed on average 10-20 pieces of IP from different vendors, making licensing third-party IP “an incredible technical, business and legal challenge”, he said.

As design cycles shortened and applications converged, re-use of IP was becoming increasingly important. Also, “fabless” semiconductor companies – those that designed semiconductor devices but outsourced the manufacturing, often to places like Taiwan or Singapore – were increasingly emerging as the business model, Travers said.