Jim Hogan details his views of SoC opportunities and again reveals his SoC Realization investment shopping list

By _EDA360 Insider

May 13, 2011

Jim Hogan gave the keynote at today’s EETimes Virtual SoC event and he presented a deep dive into the opportunities in semiconductor device development and the associated EDA opportunities from the perspective of an investor who makes his money building, buying, and selling companies. (Note: NOT chips and tools, companies.) As always, Hogan displayed an immense grasp of the forces that move and shake our industry.

He started by noting that systems companies (such as Microsoft, Google, Oracle, and Apple) are increasingly relying on SoCs to differentiate their products and to deliver value. However, make no mistake he said, software now sells hardware (the Jim Hogan way of saying “apps-driven”), which is an inversion of the traditional semiconductor value chain we’ve had for the last 50 years. Why is this good for the semiconductor industry? Because, as Hogan discussed later in his talk, SoC profit margins are 40% to 60% while the profit margins for “discrete” semiconductors is 10% to 20%–much lower. As a result of the system companies’ focus on SoCs as differentiators, a lot of the system value falls from the system companies to the semiconductor companies. However, what Hogan didn’t explicitly say is that the semiconductor companies have generally been less successful at fully realizing that value from their customers, with some notable exceptions in the PC processor business.

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