Reasons Why Hardware Startups Are Opting Custom SoCs !

hardware startups opting custom soc

According to industry sources like IMEC IC-link, custom SoC design projects around the world are growing at 15% CAGR. This is quite significant.  Though a wide range of ARM based System on Chips are available off the shelf from several design partners, more and more companies are working towards creating their own, unique custom SoCs.  So where is the growth happening and what are the benefits of building your own SoC?

A primary contributor to this trend is companies working on IoT solutions. IoT encompasses a very broad space; consumer wearables, agriculture, medical et al. Though the form factors of an IoT end point could be very different, there are some underlying elements to any IoT system which are common. Most IoT end points contain some kind of analog sensors with embedded intelligence powered by software running on a processor – with the digital block managing control and communication and the analog block undertaking measurements or acting as an interface.  And IoTs inherent diverse nature has created opportunities for a huge amount of hardware innovation.

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Growth in Custom SoC

But hardware innovation by IoT companies aside, there are two other aspects which are contributing to growth in custom SoC designs.

First, is due to start-ups. There are several companies providing semiconductor IP today, so there is easy path for innovation. Start-ups could take a few IP blocks from different vendors, create a solution that doesn’t exist yet and go in and capture a certain market segment relatively easily as opposed to when semiconductor IP was scarce.

The second driver is OEMs looking to reduce their bill of materials by replacing multiple components with a single SOC. This not only leads to cost reduction, but the OEM can now differentiate and create something which no one else has in the market.

There are three primary reasons which easily sum up this activity, irrespective of which entity is undertaking the SoC development.

The first reason is the reduction in Bill of Materials (BoM). The cost reduction for an established product which is already shipping in volumes or has very high anticipated prodcution volume can be significant, when several components are replaced by a single custom SoC. At high volumes, the non-recurrent engineering (NRE) cost of SoC design gets amortized due to savings in component sourcing and PCB area reduction.

If an OEM’s device has say, a PCB with 15 components, then replacing all of those components with a single SoC will no doubt lead to a reduction in BOM costs overtime. Some of the numbers from ARM’s design partners indicate that in multiple cases, partners were able to achieve almost 90% reduction in BoMs. Additionally, reduction of so many devices on a PCB will also lead to a clear reduction in the area of the PCB. So this further adds to the reduction in cost.So, besides achieving a 90% reduction in costs, several studies indicate that companies were also able to achieve a 85% reduction in PCB sizes. These are very compelling numbers.

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Another major reason for custom SoC design is the control over one’s supply chain. If its one’s own custom SoC design, one can produce it whenever and in how much ever quantity it is needed. So, a company is no longer dependant on the capacity of the supply chain and the availability of components in the supply chain. A typical PCB has several components on board and even if one of the devices goes out of supply or reaches end of life, the entire PCB would need to be re-designed as the same cannot be manufactured as is anymore. It could also lead to additional costs in re-qualification and re-certification. So by controlling the supply of the chip, one can control the production for a long time.

And finally, the third reason is differentiation. If one is able mix and match the design to be able to create a custom device which brings in a lot of value, then the product will be unique. A specific requirement of say safety or security would perhaps need to be met and this functionality may not be available from an off the shelf SoC. This is another key driver which leads to innovation.

As innovation in custom SoC design continues, we are bound to see a much wider variety of applications and devices of impressively unique form factors.

(Disclaimer: This is a guest post submitted on Techstory by the mentioned authors. All the contents and images in the article have been provided to Techstory by the authors of the article. Techstory is not responsible or liable for any content in this article.)

Image Credits: tomshw.it

About The Author:

Guru GanesanGuru Ganesan, is the President & MD of ARM India since 2009.

Prior to that, he was Vice-President, Engineering at ARM, San Jose, California.

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