▲MICROIP Chairman James Yang ( photo source : ETtoday )

Thanks to ETtoday for the report：

Semiconductor and chip design are becoming increasingly sophisticated. However, regardless of how extensive and complex the logic and circuit design may be, everything must start from the “architecture” concept. Building a solid foundation is essential for successful development, just like constructing a building. Planning the land and roads and gradually building stable high-rises ultimately creates a city.

In integrated circuit design, EDA tools are used to lay the foundation of the chip. EDA stands for Electronic Design Automation, which utilizes computer software to automate the design of complex semiconductor products, thereby shortening the product development time.

In other words, when the semiconductor and AI chip processes need to efficiently complete all functional designs and performance analyses, EDA must be involved. This eliminates the need for labor-intensive workflows traditionally required in chip design, which is why the technology industry regards EDA as the “mother of chips.”

“Our service is to help customers find the best chip functional combinations and basic layouts in a very short time through EDA software, shortening development time and reducing unnecessary costs,” explained James Yang, chairman of MicroIP.

How to Break Through with 75% Market Share Dominated by the World’s Three Major EDA Giants?

In fact, at this year’s Design Automation Conference (DAC), the dominance of international giants in the EDA market was evident, including Synopsys, Cadence, and Mentor Graphics (rebranded as Siemens EDA after being acquired by Siemens Group). These three giants hold over 75% of the global market share.

Founded in 2011, the small Taiwanese company MicroIP has emerged as a dark horse in the EDA field by leveraging resources from the same group, Arculus System. They seized key niche points absent from major players and, along with Arculus System, advanced into the top five in the EDA market. Compared to the blue ocean competitive advantages of large whales, this small fish secures its position by focusing on smaller niche products, solidifying its presence in a blue lake market.

“We don’t want to compete head-on with our former employer; instead, we aim to form partnerships.” When James Yang left Realtek to establish MicroIP, he constantly considered what business angle could still be tapped in IC design. Initially, they started with an IP Mall, targeting small and medium-sized IC and IP design companies or enterprises without IC and IP design departments but with related needs, offering multidimensional IP product services.

However, chip design requires a lengthy verification process, and IP is not like the App Store, where customers can directly purchase and download apps. It still requires extensive and complex customization services, leaving most companies only observing.

After the IP Mall platform went live, there were still no orders, and the company faced a funding crisis, almost leading to bankruptcy.

▲MICROIP Chairman James Yang ( photo source : ETtoday )

A Mining Chip Order Establishes IC Design and EDA Tool Status

In 2016, the company transformed. James Yang’s team thought of outsourcing IP services, making every company needing chips a potential customer. They used Arculus System’s EDA tools to offer core services of complex chip design, helping customers complete chip products from specifications, design to manufacturing. Coincidentally, the cryptocurrency mining boom arrived, and a customized mining chip order generated tens of millions in revenue.

This new business model, explored and researched over many years, gradually focused on opportunities missed by international giants, with almost no other Taiwanese companies engaging in EDA. James Yang stated that although Moore’s Law is slowing, the processes continue to evolve, and the demand for EDA will only grow stronger. “We spread out the entire design flow to find ‘architecture design’ as our niche point.”

“Initially, it felt strange. Why haven’t the three major EDA companies entered this field? They have extensive business, marketing, and R&D talent. Are we uniquely insightful?” It turns out that the market’s architecture design was mainly done “manually,” requiring simulation verification for correctness. Everyone was accustomed to this time-consuming traditional manual method.

However, MicroIP combined the innovative thinking of the same group’s Arculus System, understanding customer needs first to provide chip design services, and then using Arculus System’s computer EDA tools to plan chip architecture for customers, achieving performance verification tests. This has now won the favor of major U.S. communication companies and other clients.

Chip Design is Like Assembling a Computer

This service concept is akin to customers visiting Taipei’s Guang hua Digital Plaza, presenting their equipment needs, whether for document processing or graphic image processing, allowing the store clerk to find the most suitable hardware specifications to assemble the computer.

When facing EDA services or even AI tools, won’t it worry about architecture designers losing their jobs? James Yang laughed and said, “Of course not!” He explained that if you need to make a controller chip today, there are 21 modules at the highest level, with over two million different possibilities between hardware and software execution. Manual selection would only allow architecture designers to find “just usable” options.

MicroIP’s chip design services utilize the group’s unique EDA tools to narrow the scope of module possibilities, shorten selection time, and even help architecture designers find the most suitable golden ratio in terms of Power, Performance, and Area (PPA) based on product definitions. As design efficiency improves and problems are easily solved, customers can naturally focus their precious time on better R&D.

Even if companies do not understand semiconductors, they can still get the desired chips by stating their needs. This is the new IC design division strategy proposed by MicroIP, with revenue steadily surpassing the billion-dollar mark and expected to grow 2 to 3 times. In the future AI chip battle, we will continue to see MicroIP helping various companies tailor their own chips.