EE Times – Factoryless companies can expect to regain leverage

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

Bagherli, former CEO of Dialog Semiconductor and now an investor and board member of various companies, described the trends impacting the semiconductor industry, which revolve around four key areas: geopolitics , Covid-19, climate change and the semiconductor bear cycle. He said the different chip laws around the world will likely lead to overcapacity in the near future. Following this and the downward cycle, he commented, “It means the fabless business model is regaining influence. They [the fabs] will be desperate for your business, and the cost of silicon will drop.

Since the sale of Dialog Semiconductor, Bagherli has been a prolific “commentator” on key semiconductor industry events and trends. In addition to the geopolitical aspect of the impact on the industry, in his speech he offered his insights on changing technology trends and business models.

Jalal Bagherli highlights some of the major technology trends impacting the semiconductor industry. (Photo: Nitin Dahad)

Since the event is focused 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 an 18 month track before the next funding round
  • Stay away from “state-of-the-art” digital products – differentiate yourself from this to have a higher chance of success with less funding
  • Focus on winning customer designs that will help create a demand pipeline for the next recovery which could be at least nine months away
  • Examine the opportunities created by strategic insourcing by system companies – as companies bring chip design in-house, they may not have all the necessary expertise, which creates custom opportunities for niche products and to mixed signals to complement their own processors.

Bagherli is currently co-chairman of Williams Advanced Engineering (WAE), advisor to Silicon Catalyst in the UK, chairman of test hardware company ATE PTSL (which just this week acquired Dallas, Texas-based ThinkMEMS, and has also closed a $30 million deal last month (investment from Tikehau Capital), and an investor in Salience Labs. The WAE field, with its Formula 1 racing history, served as the backdrop for this latest series of Silicon Catalyst “Shaping, Storming, Standardizing and Realizing Semiconductor Startups” events (the latest held at Arm’s headquarters in Cambridge, UK).

It takes teamwork to bring a new chip to market

The Silicon Catalyst event included a fascinating overview of 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 and 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. (Photo: Nitin Dahad)
Salience laboratories
Vaysh Kewada, co-founder and CEO of Salience Labs, provides an update on the company’s photonics solution for AI inference. (Photo: Nitin Dahad)

We also heard about PTSL’s journey from kitchen worktop with no debt or equity and just £4,000 of founders capital, to finally raising $30m in external funding this year for the next phase of growth.

PTSL
Jordan Mackellar, Founder and CEO of Probe Test Solutions (PTSL), talked about his startup journey, including using a vacuum that provided wafer suction on the kitchen top for his first test bench . (Photo: Nitin Dahad)

Additionally, fund manager of WAE’s technology investment group, Foresight, also highlighted its work with deep tech startups, with which it engages at the seed funding stage.

Joe Jones - Williams Advanced Engineering
Joe Jones, Product Manager for Battery Technologies at Williams Advanced Engineering, provided a fascinating insight into the work on battery management, battery intelligence and battery digital twins that are paving the way for the electrification in many industries. (Photo: Nitin Dahad)

The event also showcased the importance of the ecosystem and teamwork to bring a chip to market. Raspberry Pi COO James Adams talked about the work involved in developing its own microcontroller (MCU), the RP2040. He said, “Making chips is tough,” describing how it took teamwork with Arm and imec and three years to get from concept to final product.

Raspberry PI making chips is hard
Raspberry Pi’s James Adams talked about his journey to bring his own MCU to market, from concept to production volume. (Photo: Nitin Dahad)

He said: “We had a great bootstrap with Arm and imec flex access. It’s teamwork. Outlining Arm’s involvement in the development, Gabriella Giuffrida, Arm’s senior business manager for the flexible access program, said the technology was “incredibly expensive” for a startup, so it was important to minimize risks and provide access to the massive Arm ecosystem.

Overview of flexible arm access_c
Arm’s Flexible Access program starts out free, and fees are phased in as a startup goes through its funding stages. (Image: Nitin Dahad / data source: ARM overview at Silicon Catalyst)
flexible arm access_c
Arm cores are available as part of the Arm Flexible Access program. (Image: Nitin Dahad / Data source: Presentation of the arm at Silicon Catalyst)

Imec ASIC Design Lead Paul Ovington spoke about his role in helping Raspberry Pi bring its MCU to market through its Imec.IC-Link unit. He said, “We help fabless semiconductor companies bring their products to market.” For Raspberry PI, they helped with project management, packaging, testing and qualification, tape-out assistance, and rapid production ramp-up.

James Adams highlighted key takeaways from their experience releasing RP2040. He summed it up like this:

  • It is important to hire the right experience, both internally and externally
  • Leverage external experience, especially in navigating the complexities of chip design
  • Leverage proven external intellectual property, making sure not to reinvent the wheel, but focus on your own unique selling point
  • Build the virtual team you need

Serving the silicon renaissance

First established in 2015 in the United States by Rick Lazansky, Mike Noonen, Dan Armbrust and Tarun Verma, Silicon Catalyst says it is the only incubator in the world focused exclusively on accelerating semiconductor startups – including Photonics, IP, MEMS, Sensors, Materials and Life Science. Its model provides support to startups through a network of in-kind and strategic partners to help significantly reduce the cost and complexity of development. Silicon Catalyst provides startups with a pathway to the design tools, silicon devices, networking, access to financing, banking and marketing acumen to successfully launch and grow their companies’ new technology solutions.

As Richard Curtin, managing partner at Silicon Catalyst in the United States, reminded me on a call this week, “There is a silicon renaissance,” and he added that we should remember that semi- conductors are the oxygen that allows software to breathe: a good reason for a silicon-based incubator. The UK Silicon Catalyst chapter was launched last year with Sean Redmond as managing partner.


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Group Photo - Silicon Catalyst - Bletchley Park