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NVIDIA's GPU License Plan Illustrates System-Design Transformation

Comments(1)Filed under: ip, NVidia Tegra, graphics processors, graphics processing, NVidia, GPU, Nvidia Titan, Chris Malachowski, Jen-Hsun Huang, computer processor, rendering, modeling software

Is NVIDIA's decision to license its Kepler GPU core a stunningly shrewd business move that brings a compact, powerful but low-power piece of IP into the SoC design world? Or is it a Hail Mary pass destined to slip past outstretched hands?

The cop-out answer, of course, is "it's too early to tell," but let's walk through the scenarios because NVIDIA's decision is emblematic of the roiling change in system design today.

The news

NVIDIA Executive Vice President and General Counsel David Shannon announced the decision in a blog post on June 18, saying:

"It's not practical to build silicon or systems to address every part of the expanding market. Adopting a new business approach will allow us to address the universe of devices. So, our next step is to license our GPU cores and visual computing patent portfolio to device manufacturers to serve the needs of a large piece of the market."

A broad strategy will begin with the NVIDIA Kepler architecture. Its performance and functionality are pretty well known; the core is at the heart of the next-generation Tegra mobile processor (Logan) and the current GeForce, Quadro, and Tesla graphics processors. In addition, Shannon points out in his post that Kepler "operates in the half-watt power envelope."

Cue dramatic orchestral music as the curtain rises on a new mobile applications market for NVIDIA (mobile).

Cores considerations

So there is clearly plenty of potential for the cores-licensing strategy (and it's not new to NVIDIA, which licensed GPU technology to Sony and patents to Intel). But the road to paradise is not always strewn with red roses.

From a business perspective, the licensing of a core is not the same as selling an IC. For one thing, there's a different revenue stream from your customer, who has to sell its devices with your cores before you see income.

Says Semico Industry Analyst Rich Wawryzniak, "One of their GPUs could go as high as $30-$40 per part. They'll never get that licensing IP." Well, yes and no: ARM's shown you can make it up in volume, but there aren't many ARMs in the IP business.

But the big challenge is in the design-in process. A standalone processor solves a big bounded problem for a system architect. And in relative terms, it's a turnkey solution. Convincing an SoC designer to incorporate your graphics core into his or her IC is a more complex process not just because it's a competitive space but because the process and methodology of IP integration is still evolving. 

Says Wawrzyniak:

"You're not buying the IP like a frozen leg of lamb from the butcher and all you have to do is pop it in the oven. You need an infrastructure internally to manage the IP."

While engineering consultant and EDA DesignLine editor Brian Bailey says "having a design does not make you an IP company," he also notes that a serious, marshaled IP effort at NVIDIA will drive the company's long-term R&D. That means new directions and opportunities.

And "Not all chips need to be the most powerful; they may need to be the most power frugal," Bailey notes.

Cool graphics, coming to an IP block near you, tell you I do. (source: NVIDIA.com) 

Big squeeze

This churn is amid rapid change in system design. Differentation, as Frank Schirrmeister points out in a cogent post on the System-Level Design Community site, is increasingly hard for semiconductor vendors. He writes:

"With the IP providers providing more and more complex subsystems and the value in system houses moving upward into applications—essentially making the hardware for phones and tablets delivery devices for applications—the differentiation of semiconductor vendors has become harder and harder."

Simply put, semiconductor vendors are looking to move up into the software stacks at the same time they're considering moving down into the IP space.

"In the future, if you are not a systems integrator, you will be an IP supplier. There can be systems integrators at the board level, but most will be at the chip level," says Bailey.

Decision time

This means tough decisions lie ahead for silicon providers, and, in the end, the only wrong answer is staying the course. Technology, business, and methodology change so relentlessly that the only alternative to change is death or irrelevance (which is the same thing as death in the Silicon Valley). NVIDIA Chief Scientist Bill Dally sounded the call for change when he talked about what he calls the digital productivity crisis in a Design Automation Conference talk this month. 

Tensilica co-founder Chris Rowen sketches out three change scenarios and their challenges for companies in similar situations.

  • The first is pivot to the broad SoC business, building on top of one's core technology. 
"Unfortunately, that requires so much market know-how in all these different segments and a willingness to mix high-margin and low-margin silicon business together," Rowen notes.
  • The second is just to avoid wading into new markets and stick to your knitting.
  • The third is to adopt a licensing model for low-margin, high-volume segments.
"But sometimes (that) doesn't work in practice because resources and corporate priorities remain focused on the chip business," Rowen says.

Bottom line?

It's rare for a silicon vendor going 200 mph to pivot gracefully into new models and markets, but when it happens it's a beautiful and awe-inspiring thing. NVIDIA is chock full of smart peopleled by cofounders Jen-Hsun Huang and Chris Malachowskyand they have as a good a chance as any company to do it. And in 2013, there's an ecosystem around them to help out.

I'll follow up a post on the impact on EDA, but for now...

  • What do you think?
  • Am I overly optimistic?
  • What pitfalls do you see for companies grappling with system-design change today?

Brian Fuller

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