Warren Savage On: The Other Side of the Rabbit Hole

By _IPExtreme electronic weekly

December 16, 2010

2010 is shaping up to be a spectacular year for semiconductors. Gartner says the semiconductor market has rallied and should reach a record $300.3B in 2010, up 31.5% from 2009. This reflects more than $70B increase in revenue in a single year - a record jump for the semiconductor industry.

Suppliers to the semiconductor design chain are also experiencing great years. we've seen a dramatic rebound in EDA stock prices for Cadence, Mentor, and Magma, and Synopsys continues to be the cash machine that fuels acquisitions to fortify its lead position in the space.

In the recent IP-SOC conference in Grenoble, France, Gartner also reported expectations for a banner year in semiconductor IP with 2010 revenues expected to rise 24.9% and that the number of 3rd-party IP blocks in chips will double by 2014.

Even more remarkable is that this has occurred during a year where there is still much doubt in the economic stability of the global economy with governments saddled with enormous deficits, banks holding onto their money, and consumers shell-shocked into a level of thriftiness not seen in generations.

As we entered the "rabbit hole" in 2009 (see my November 2008 piece, "Doom and Boom"), we all knew that we were headed for a new era, but we couldn't know what it would be like on the other side. I think the record revenues we are seeing in 2010 point to some significant changes in semiconductor and electronic systems business and we are getting a glimpse of the new Wonderland.

So, what changes do we see on this side?

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