By Colin Harris, Vice President, Chief Operating Officer and General Manager, Communications Business Unit, PMC-Sierra
As the GSA celebrates 20 years of industry collaboration, it’s hard to believe that a handful of innovators going fabless caused such a stir in the industry. But it did. The fabless model was seen by the industry as a fundamental attack on its value chain, and without the inception of the Fabless Semiconductor Association (FSA) to promote the business model globally and facilitate collaboration, it would have been a lot more difficult for the new entrants to break in.
We Don’t Buy from Fabless Guys
When PMC first began to approach the Tier 1 communication equipment suppliers, it was continually blocked by conservative buyers who did not understand its business model or the fabless industry. The perception of risk is hard to overcome in a business built on reliability.
“I have a vivid memory of being in the lobby of AT&T, which at the time was one of the largest direct consumers of electronics, feeling quite depressed that we weren’t making design-win headway,” said Colin Harris, Vice President, Chief Operating Officer and General Manager, Communications Business Unit, PMC-Sierra. “I bumped into the CEO of our number one competitor at the time, who had also embraced the fabless model. We commiserated, and he mentioned that a group of leaders had gotten together and formed a group to start changing minds. The FSA had been born, and PMC quickly got on board.”
Since then, the fabless model has been validated time and again, and PMC is a well-established, leading provider of semiconductor and software solutions for storage and networking infrastructure. But the road was by no means an easy one.
Real Men Have Fabs
The initial response to the fabless model was one of skepticism. Customers and OEMs were worried about quality, assurance of supply and the longevity of the new companies. The reaction to the FSA was even more negative.
Suppliers saw it as a consortium to lower wafer prices. Integrated Device Manufacturers (remember that term!) were terrified by the nimbleness and innovation that the new companies showed. Vitriol—even personal attacks—was heaped on the association and its members.
The FSA kept the world grounded in reality through its strong message and drive to get the word out to build understanding. By 1997, fabless companies were respected, and by 2000, they had won the war. Results beat fear mongering as the fabless companies grew faster than their competitors and the semiconductor business was forever changed.
The fabless model worked very well for PMC. The company has won awards for innovation, supply continuity and quality from many of the leading Tier 1 OEMs in the world. PMC is known for doing the hard stuff really well, finding simple solutions to complex technology problems. Sometimes taking risks is necessary, even essential to creating new technologies, and being able to focus investment on R&D to build innovative systems and mixed signal technology has been key to its success.
The Original Hackathon
What are the common problems facing the industry and how can they be tackled? What grand challenges will it face in the future? Whether the issue is foundry capacity, getting new grads interested in semiconductors, verification methodology or finding sources of innovation, the GSA is the original hackathon, getting the best and brightest together to discuss how the industry can collectively improve and lead.
It is a unique forum with enduring value due to this openness. As an organization, PMC has embraced this openness and it strives to continually improve using the collective knowledge of its industry.
For PMC’s products to be at the foundation of worldwide enterprise storage systems, data centers and cloud infrastructures, they need to be interoperable with the ecosystem to enable time to market and time to money for its customers. Collaborating with the ecosystem and with customers to find innovative ways to reduce the total cost of ownership, while still delivering the unique functionality is crucial for success. It epitomizes the spirit of the GSA.
Deadhead Stickers on a Cadillac
Startups have become Fortune 500 companies and entrepreneurs have become business leaders as the industry has grown in stature. The FSA is now the GSA, but the culture of wonder and innovation persists. Looking ahead, there are many global challenges, not the least of which are the effects of rising nationalism in our industry.
A strong global organization is more relevant than ever.
PMC is providing reliable solutions for crucial pieces of infrastructure globally while innovating for the next new thing. PMC’s SoC and platform technology builds on four core strengths: high-performance processor technology, leading mixed-signal design and system architecture and firmware expertise. Operational excellence grounded in a solid business model makes it all possible.
Looking into the Future
Looking into the future, it’s clear that semiconductor providers cannot rely solely on Moore’s Law for advancement, and the rising costs of chip development are well publicized. At the same time, new opportunities are emerging in areas like flash memory, where end markets are being completely disrupted as the industry figures out how to harness this technology. PMC is a leader in silicon and software solutions to unleash the true potential of flash.
One thing is certain: the GSA will pave the way as the landscape changes.
“Hats off to Jodi Shelton and the team for creating a relevant and enduring institution that will take our industry through the next 20 years and beyond,” said Harris