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Altera CEO: Industry is looking up despite down 2014

Posted: 30 Dec 2013 ?? ?Print Version ?Bookmark and Share

Keywords:Altera? FPGA? Moore's Law? 3D chip? EDA?

Following a difficult year, John Daane, CEO of Altera, shared his views on the outlook for semiconductors and engineering for 2014. I started off asking about his opinions on the slowing and eventual end of Moore's Law in the next 10-15 years at the 7-5nm node.

The near term looks upbeat, because scaling will continue "for several generations," offsetting rising fab costs, Daane said. "We need to ride this curve and for the next ten years we can do that." In the longer term, "we have to switch to a new switch, [because] you can't split the atom, so we have to go to a new material other than CMOS." He recalled similar fears when he started his career 17 years ago. "Everyone said one micron was the end, but we found new materials, [so] fundamentally, I believe Moore's Law continues."

Some say the move to 3D chip stacks will give a boost to high-end chips about the time Moore's Law starts slowing. Daane expressed some skepticism about chips stacks, at least in the short term, even though (or perhaps because) Xilinx has shown leadership in so-called 2.5D stacks that link die places side by side on a silicon interposer.

John Daane

Altera CEO, John Daane

"The cost is still too high for the silicon substrates, so you will see it in in niche products for much higher performance or functionality. Those will be first adoptions. When it goes into handsets is when it hits its stride," he said. "We've been doing a lot of research [in the area], and you will see products from us." He would not say whether any of them will ship in 2014.

The good news: Altera had one of its lowest turnover rates in its engineering ranks this year after a similar low rate in 2012. This year, the FPGA vendor hired several hundred college grads and experienced engineers, mostly in the US. "Unemployment is down in Silicon Valley but still higher than it was in 2010." However, "we're not going to be graduating enough engineers in the US."

The Semiconductor Industry Association funds some research in EDA, materials science and other chip-specific areas to bolster grad programs. Still, "US masters and PhD candidates in STEM fields are more than half [that of] foreign nationals, so we're not getting US nationals interested, and that [indicates issues] much earlier in schooling."

The past year has not been a stellar one for Altera or much of the semiconductor industry, but Daane held out hopes the year ahead will bring a rise in capital spending at cellular carriers, driving sales of communications chips.

If you take memory chips out of picture, which did well due to shortages, I've seen figures of 1-2 percent growth this year, roughly another flat year. We've been moving sideways. It's hard to grow a $300 billion industry at a high rate. Overall I see a more mature semiconductor industry not subject to the boom and bust cycles of the past.

Spending on communications infrastructure was "at a low point" in 2013, while global GDP was down with ongoing recessions in Europe and an industrial sector that "slowed down quite substantially."

Smartphones were the driving force in semiconductor revenue in 2012 and 2013 after significant spending on gear for the first LTE networks in 2010 and 2011. "Now the consumer side may slow a little bit, and we probably will see more infrastructure spending" in the year ahead.

The recent Avago-LSI merger bid and the breakup of Mindspeed are signs of a maturing, consolidating semiconductor industry. Activist shareholders are putting public pressure on Marvell, Nvidia, PMC Sierra and Triquint to make similar moves. "If there's not as much growth, you need higher marketshare... and that will force some changes."

Don't expect consolidation in FPGAs. "I think a lot of the consolidation in programmable logic happened in the early and mid-90s, when we bought Intel's product line, Xilinx bought Philips', and Toshiba and others sold or shut down businesses."

Now Altera, Lattice, and Xilinx command more than 90 percent of the FPGA market. The sector requires players to invest in their own programming tools and IP blocks, creating a barrier to entry. He dismissed the newest startups such as Achronix and Tabula. "We haven't seen them in the marketplace, hardly at all."

Altera's acquisition of Enpirion in May is a better model for how the sector will find growth going after adjacent markets. The startup's power modules help reduce power consumption in designs that use an increasingly broad array of voltages.

They had a good product set, and we scaled them into more accounts such as communications, where they didn't have the money to invest. Their revenues will grow from $20 million this year to $35 million next year and perhaps $60 million the year after. It's a very steep ramp, and design wins are very strong.

Although FPGAs have almost no role in today's smartphone boom, they could someday find a place in the even more power-constrained emerging markets around the Internet of Things, Daane said. "What you could see over time is an ARM Cortex-M or -R" core in an FPGA. Today's low-end Altera Cyclone parts use dual Cortex-A9 cores. "We have nothing announced or plan to be announced soon, but FPGA makers could do it if it's a priority."

Don't expect an Altera-powered Pebble smart watch. "You are not going to wear a $1,000 Xeon or FPGA." However, security cameras and other industrial Internet applications could be a fit for FPGAs. "You have to have the right features and cost points. A lot of these areas are so specialized that the volume will not be there for ASSPs, so it becomes a perfect environment for FPGAs."

Using "aggressive process technologies and creative IP we can get there." A decade ago, "who would have thought you'd see FPGAs in cars or servers? We've certainly opened up markets no one ever thought of."

Finally, I asked about progress using Intel 14nm process to make Altera's Stratix 10 FPGAs. He said it's still early days in the foundry engagement announced in February.

Altera has produced its first test chips in the Intel process and expects the first product tapeout in late 2014. A really good comparison of Intel and TSMC in important areas such as product lead times and customer satisfaction won't be available until sometime in 2015. "It takes a couple years to develop a chip with billions of transistors, DSPs, PLLs and transceivers running at various rates. It's a lot of complexity," he said. "From what I know," Altera is Intel's largest foundry customer, "but I suspect we won't be their last."

- Rick Merritt
??EE Times

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