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Xignal program reduces upfront licensing costs

Posted: 09 Mar 2004 ?? ?Print Version ?Bookmark and Share

Keywords:vic? xignal? virtual integrated circuit? semiconductor communications market?

Xignal Technologies, an analog IP solutions provider for the semiconductor communications market, is jumping the gun in the analog and mixed-signal business arena with the announcement of a new virtual partnership program that significantly reduces upfront licensing fees and shares the market risks with the customer.

The model, Virtual Integrated Circuit (VIC) partnership program, combines Xignal's technical specialty with the customer's sales channels and market access. "This new model allows Xignal to move more flexibly into multiple environments while adapting to the different needs of customers," said Al Gharakhanian, VP of business development department at Xignal.

"We'd like to think of Virtual IC as a partnership program rather than a business model," added Gharakhanian. "The way it works is that the customer engages with us on a product and we offer them the tail-end solution based on our system level experience in the broadband serial market. So in combination, we define the product, we do the development, and we rely on our customers to do the manufacturing."

Tackling the issue of compensation, Gharakhanian elaborated how the new model is suited for small-scale design companies starting out to face the big guns in the industry. "We make our money not up front," he said. "We charge our customers low upfront values, or sometimes none at all, but we ask for reasonably more royalties. So this happens to be an interesting business model that is suitable for industry downturns."

Gharakhanian added that Xignal is well known for delivering highly-sophisticated analog IP designs and with the Virtual IC program, the company enables more customers to benefit from its analog/mixed-signal

expertise.

VIC program setup

The Xignal's VIC program is ideal for semiconductor companies dealing with broadband equipment or vendors needing highly integrated analog chips.

In the traditional model, the IP solutions provider usually charge customers a high licensing fee amount while taking a big part of the product idea and feasibility marketing/sales study. Using the new model, Xignal charges the customers a minimal upfront licensing fee while taking the bulk of the development/design phase. This method reduces the cost to enter market while minimizing shortcomings on design resources and providing missing core competencies. Further, Xignal shares in the market risks with the new model.

Gharakhanian clarified that the VIC is a new model and not an "off-shoot" or an enhancement of the traditional IP model. Also, he said that Xignal has received several positive responses on the new model, although he declined to name these companies until formal transactions are confirmed. "It would certainly take us some time to get this model established, however, I believe the virtual IC model is beneficial to companies who cannot afford the upfront design costs but have a potential to producing good devices." He also added that this model is very suitable for Asia-based design firms focusing on application specific IPs (ASIPs) and core IPs (CIPs).

Xignal offerings focus on complex analog and mixed-signal subsystems that are intended for system-on-chip (SoC) integration or standalone products. In addition, the company's CMOS-based designs are easily integrated to deliver the right technology to support a number of applications for the communication systems market.

- Anthony Capati and Dave Ledesma

Electronic Engineering Times - Asia





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