"How Semiconductors are Revolutionizing the Consumer
Market Space"

A Panel Discussion at TiECon 2007, Saturday, May 19, 2007
12: 30 PM - 01:30 PM

Key Takeaways:
- Emerging technologies in the Semiconductor and Networking
targeting the consumers.
- Applications enabled by next generation semiconductor companies.
- Opportunities and Challenges in the consumer market.
- Real world experiences of Semiconductor consumer startups.

Panel Chair & TiE Host:
Surya Hotha, Broadcom Corporation

Moderator:
Pete Foley, Executive in Residence, Tallwood Venture Capital

Panelists:
Dr. Craig Barratt, President & CEO, Atheros Communications
Kanwar Chadha, Founder, Member BOD, VP Marketing, SiRF Technology Inc.
Manju Hegde, Co-Founder & CEO, AGEIA
Alan Kramer, President & CEO, UPEK Inc.
Sanjeev Kumar, Founder, PortalPlayer (NVIDIA Corporation)

Interesting points from the discussion

On the challenge of integrating 3rd party logic into mega ASPs @ 65nm
technology node:

Kanwar (SiRF): If integration is the only issue, large companies definitely
have the advantage; however, if it is differentiation, smaller companies
can build on anchor functions.
Manju (Ageia): Startups are fundamentally more agile than large
companies and they can figure out a niche for core strength. The big
companies will copy you, so stay ahead.
Sanjay (PortalPlayer): Portal was doing only audio. They picked up
2 core competencies that were better than anyone else. It was especially
daunting because TI had DSPs with audio but they had not figured out
what to do with it.

Innovation is important but standards place constraints on this front.
How to innovate with standarization?

Craig (Atheros): For startups, find an inflection point in new generation
standard. If smaller companies are agile, react rapidly. As the market
(and your company) matures, operational efficiencies, low cost structure,
customer relations will start to matter more.

In the ethernet market, the standards are very stable so it is risky for
Atheros to venture in that space, however, they are now a mature
company and can afford it.

The best way to tackle a standards based market is to determine the
inflection point. Also, for startups, the best case is to write something
before it becomes a standard.

Large companies embed functionality (bundling). How do startups react?

Bundle solutions, not just functionality. Ultimately, it comes down to
the value of the socket. As soon as the socket stabilizes, startups have
to move away. Larger players always have a hard time keeping up with
a moving socket.

From a VC perspective, new opportunities for enterpreneurs:

Example: All new wireless models are enabling new applications which
in turn come with security challenges. Address these.
New threats / opportunities: WiMax, Flexible organic displays, Need
for security in commerce for mobiles.

Unanticipated business opportunities encountered by panelists:

SiRF had a good example of a Korean company that wanted 100k
devices for radar detection. The company had a massive database
of cameras which were fed into the GPS device.

Metro WiFi; multimedia distribution. The key question is how to
horizontally expand – need to integrate more functionality over time.

UPEK had originally intended to serve the end commerce applications
but they found a surprising business opportunity in the gaming industry.
Finger gold in Japan became possible with UPEK's technology.

Software v/s Hardware engineers:

It's all about the ecosystem. All panelists agreed that s/w was becoming
more important. Most of them had more s/w engineers than h/w
designers.

On difficulty of building a chip and putting it in a socket:

Volume needed to amortize the cost of a chip is large. Implement a
flexible solution in hardware. Portal did this by having 3 generations
of MP3 devices with one chip; They took a risk on semiconductor but
aggregate volume over time with flexibility in software helped them
sell the same chip for three Christmas seasons.

PortalPlayer started in India first, not the USA. However, according
to Sanjeev Kumar, this is not relevant for today's environment.
In 1999, when PortalPlayer got started in India, the cost of operation
was 3x lower than it is now.

Craig's (Atheros) half of the employees are employed in India/China.

Attrition is the key issue in India.