Shiv Tasker

Semiconductors: Sector in Transformation

The model of small companies coming up with breakthrough products is, in fact, dead - primarily driven by the cost of design. A reasonably large chip with huge amounts of integration cannot be brought to market for less than $15M - further the cost - and time - of getting it designed into an end product has gone up as systems houses demand prototype boards, software and even some applications running on the chip before they will commit to it. A VC funding a new chip startup has to assume $40-50M in capital before seeing any revenues. These design costs have to be reduced by 10x before we will see any fundamental shift in competitive dynamics.