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WSTS rolls PLD data into standard-cell category

Posted: 11 Oct 2005 ?? ?Print Version ?Bookmark and Share

Keywords:programmable logic? pld? standard-cell?

The World Semiconductor Trade Statistics organization has rolled its numbers for programmable logic into the larger category of standard cells, prompting a debate over whether the move provides less visibility into the PLD industry.

Doug Andrey, principal analyst at the Semiconductor Industry Association, said the WSTS made the move because of "an exposure issue," i.e., a large PLD company's believing competitive information about pricing and other sensitive issues could be gleaned from the data.

For the April-June period, the WSTS reported programmable logic, which was about $4 billion in total last year, as part of the larger standard-cell category.

The PLD sector has four players. Altera Corp. and Xilinx Inc. dominate; Actel Corp. and Lattice Semiconductor Corp. together account for 10 to 11 percent. With only four companies, it was difficult for the WSTS to ensure the level of anonymity that its charter calls for, said one source. The lack of participation by one company would "skew the monthly data and potentially expose the balance of the participants."

Moreover, Lattice plans to stop reporting data at the end of this year, while Actel, which is not a WSTS member, has continued to report data for collection purposes, the source said.

One industry analyst, who also declined to be named, said that with so few companies in the programmable-logic space, Xilinx may have seen itself at some disadvantage relative to Altera, which did not report data to the WSTS. "With Xilinx the only one of the big vendors reporting, they may have felt that competitors could have insights into their unit pricing," the analyst said.

Nonissue

Sandeep Vij, vice president of worldwide marketing at Xilinx, called the WSTS move "a nonissue." Xilinx continues to provide data to the WSTS, he said, though that data is now part of standard-cell sector.

Xilinx continues to look to the WSTS to provide information about overall industry and regional trends, Vij said.

Don Faria, senior vice president of business units at Altera, said his company stopped reporting data to the WSTS in July 2001 because the WSTS practice of reporting net billings did not fit well with the PLD industry, which ships 90 percent of its product to distributors. Altera prefers revenue, rather than net billings, as the best metric of its shipments.

Altera and other programmable-logic vendors often build up inventories of a new programmable-logic product in the distribution channel. Gross billings include the cost of goods shipped to distributors, minus credits for other goods in the channel.

"By reporting net billings, we can quickly get in a situation that is taking a false viewpoint," Faria said, particularly when new products are sent out to distributors. "Our primary issue is that reporting net billings was misleading to the financial community, which is looking at our revenues, not at net billings."

But the industry analyst who declined to be identified said that in the past, he could look at the revenue data from corporate quarterly reports and compare that with the WSTS data. "If you doubted something, you could look at the WSTS. Now, you can't do that. There is no independent source to compare and contrast."

The programmable-logic vendors themselves could suffer from the lack of WSTS data, the analyst argued. If a stock analyst plans to recommend a PLD company's stock, that analyst would look to other sources of data, including the WSTS, to confirm findings. "Wall Street analysts all have their own models, but now they have no backups," he said.

But Vij at Xilinx and Faria at Altera said their companies provide detailed information to the analysts who track them and that the WSTS data added little to the mix.

The issue is part of a larger tug-of-war between the WSTS and companies that do not like to report net billings. The WSTS seeks to get immediate data about products shipped, including those going out to distributors, so that it can quickly alert its members if a downturn is appearing on the horizon. That goal is better served by net-billings data than by quarterly revenue, one source said.

The PLD vendors, with their reliance on distributors, are particularly sensitive about the accuracy of net billings. Product sent to a distributor becomes revenue when it is sold to a systems company, not while it sits on a distributor's shelf, the source said.

- David Lammers

EE Times





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