The FPGA market has been entrenched in a duopoly for a number of years now. In 2008, according to Gartner Inc., Xilinx Inc. and Altera Corp. hold together 87% of the market of programmable logic (51.2% and 35.5% respectively). The rest of the market is covered mostly by Actel Corp. and Lattice Semiconductor Corp., about 6% each.
There have been attempts to challenge the comfortable equilibrium between the two FPGA giants Xilinx and Altera. Indeed, the number of FPGA startups increased after the 2000 downturn. Over the past 7-9 years it looks like VCs founded FPGA startups one after another. Beside the attraction of a programmable logic market that has been growing a healthy 8-11%, compared to a stalled ASIC market, the availability of engineers and executives from the most prestigious firms (Xilinx, Altera, Intel, LSI, etc) may have been a factor in driving more VC money in FPGA startups.
However, most of these startups die after a few years. The list includes Chameleon Systems, which died in 2002; the promising Velogix, formerly known as Flexlogics, created in 2002, and which eventually ran out of funds; Ambric Inc, whose assets were acquired by Nethra in 2008; Mathstar Inc, which stopped operating in 2008; and CSwitch, which closed the doors this summer.
Still, there are a number of active FPGA startups. Among the most notable, one can cite Abound Logic, formerly known as M2000, which started back in 1996, and claims high density FPGA for high-end customers; Tabula, which had to go through a full reset, raised a considerable amount of money, and from which a product is expected sometime later this year; eAsic, still on going after a few misfires; Achronix, which promises a throughput of up to 1.5GHz; SiliconBlue, which aims at low power application; and certainly more companies lesser known or still in stealth mode, like Tier Logic.
All these attempts failed so far to jeopardize the duopoly Xilinx/Altera. Why is it so? Any new venture needs to come with a significant differentiation if it wants to challenge the existing competitors. Many FPGA startups came out with claims of higher densities and better clock cycles. But regardless of how you look at FPGA architectures, it is not a fundamentally difficult hardware to design, especially with the profusion of expert layout engineers that exists in this field. One cannot expect a revolution that would bring a 10x better density. Startups’ claims of 2x or higher density eventually have to face the harsh reality that Xilinx and Altera just need to move to the next technology node to match or substantially reduce the performance claims. Moving to the next technology node is certainly more accessible to a Xilinx or an Altera giant than to a startup for which a new mask can consume half of a second- or third-round financing. The bottom line is that displacing a well established vendor requires more than a 2x density improvement. First of all, you need to make sure you have the software that can exploit that extra density to deliver better results; second, for most applications, density becomes secondary as long as it fits on a board, and the ever-increasing size of the Xilinx and Altera devices makes capacity a hard sell, except possibly for a small fraction of the high-end customers; third, capacity is even more secondary when power consumption comes into play.
In a consumer electronics market more and more dictated by portable and wireless products, power is a factor that is more important that raw performance. In that regard, SiliconBlue looks the best positioned to distinguish itself from its peers, and proposes a value that both Xilinx and Altera cannot meet, at least for the moment. They are the ones to watch.