A new, faster script for fewer chips

Press, 12 November 1985, Page 28

A new, faster script for fewer chips

From the “Economist,” London It is expensive to produce prototypes of new microchips. As technical advances make chips smaller, faster and more sophisticated, the cost goes up, not down. To recoup the investment, chipmakers need production runs of hundreds of thousands or more. That gives an edge to the biggest of the Japanese and the American chipmakers. This if fine when hundreds of thousands of chips are needed, but what happens when chips are required in smaller volumes? In the past, the answer has been to adapt a standard chip. This approach — semicustomising — is a compromise: such chips run more slowly and are more bulky than a start-from-scratch full-custom version would be, but they can be made more cheaply and swiftly. Mr Robb Wilmot, chairman of Britain’s largest computer company, ICL, and a passionate pan-Euro-pean, reckons he can make that compromise less unhappy. He is setting up an independent company, European Silicon Structures

(ES2), of which he is cochairman. ES2 thinks it can turn out prototypes of more-nearly-customised chips, called compiled-silicon chips, at around the price of conventional semi-custom ones but faster, perhaps in as little as two weeks. It will draw together expertise from across Europe and service an exclusively European market. The managing director is Mr Jean Luc Grand-Clement, a Frenchman who was formerly with Motorola, an American multinational chipmaker. ES2’s head office will be in Munich; its design centres in Paris, Munich, London, Milan, Stockholm and Edinburgh. It hopes to have 300 employees by the end of next year and 1000 — and sales of ?NZI7S million - within five years. Initial capital of ?NZIOS million is sought. Mr Wilmot says that half of it has already been promised by big firms in six European countries, all of whom will be big customers. To get the rest of the money, the ES2

team is touring important European financial institutions; but no American lenders need apply. It has already bought chip-design technology from Lattice Logic, a Scottish software firm; and it will set a team of 80 engineers to develop its own automated design techniques. Designing the chips will involve collaboration between ES2 and its clients, who will be computer firms, telecommunications companies, defence contractors and, possibly, universities and schools. The chips themselves will be produced by direct-writing, a process which omits the expensive and time-consuming step of constructing a mask for etching the silicon. Direct-writing becomes uneconomical as production runs move into tens of thousands; but ES2 reckons that 90 per cent of all gadgets that might use such chips in Europe’s fragmented markets are produced in batches of less than 10,000. At those numbers, directwriting should offer consid-

erable savings. Also, computer hardware is becoming more specialised. It is much cheaper and more efficient to embed programs and operating systems in silicon than it is to run them on large, but largely redundant, general-purpose machines.

All this, ES2’s founders think, creates a market for low-run, low-cost chips. Dataquest, a market research firm agrees; it expects the market for compiled-silicon chips to grow faster than the industry as a whole. As the business is capital intensive and more akin to a service industry than manufacturing, ES2 hopes that will deter Japanese and American mass-producers and small semi-custom houses from invading this niche. There are, though, at least two British start-up firms , ready to challenge that view.