president & ceo mentor, a siemens business · acceleration of semiconductor revenue growth ic...

WALDEN

PRESIDENT & CEO

RHINES

MENTOR, A SIEMENS BUSINESS

Next Wave of Electronics-Driven Applications

Walden C. RhinesPresident & CEOMentor, a Siemens Business

July 2018

3

“Happy Days are Here Again!”

WCR, DARPA ERI July, 2018

Acceleration of Semiconductor Revenue Growth

IC growth of 22% after CAGR of 3%— 55% MOS memory, 8.4% non-memory— 2015 and 2016 growth was only 0.4%— Semiconductor industry R&D

grew 4% in 2017

22.2%

-5%

0%

5%

10%

15%

20%

25%

2011 2012 2013 2014 2015 2016 2017

Annu

al G

row

th (

Perc

ent)

IC Annual Growth

2.8 % 5yr CAGR

Source: VLSI Research, April 2018


Accelerating R&D Investment

IC growth of 22% after CAGR of 3%

R&D Increase

$0

$20

$40

$60

$80

Sem

icon

duct

or R

&D

Spe

ndin

g ($

Billi

on)

Calendar Year

Semiconductor R&D Spending $ Billions

14.0% 1.7%

27.3%-1.5%

1.4%9.8%

Source: Semico Research, June 2018


Concern about Semiconductor Industry Consolidation

“Within five years, half of all pure-play public semiconductor companies will be acquired

and the top three suppliers will likely see their market share double in the next dozen years

from around 30% share today.”Mark Edelstone

Managing Director Morgan Stanley’s Investment

Banking DivisionSilicon Valley


All Others $21.3

All Others $19.1

Broadcom$36.9

Altera$18.2

Freescale$17.3

2010 2011 2012 2013 2014 2015 2016 2017

Actual Merger & Acquisition Activities

$10$23

$12$13 $23

Source: CapIQ and Mentor Graphics Analysis.

$94

$117Linear Tech

$14.8

ARM$31.5

NXP?$51.9

$29

AllOthers

$156

Toshiba?$17.9

$11

Qualcomm?$127.2

Tran

sact

ion

Valu

e ($

B)


All Others $21.3

All Others $19.1

Broadcom$36.9

Altera$18.2

Freescale$17.3

2010 2011 2012 2013 2014 2015 2016 2017


$10$23

$12$13 $23


$94

Linear Tech$14.8

ARM$31.5

$66.8

$29

AllOthers

$156

Toshiba?$17.9

$11

Qualcomm?$127.2

Tran

sact

ion

Valu

e ($

B)


All Others $21.3

All Others $19.1

Broadcom$36.9

Altera$18.2

Freescale$17.3

2010 2011 2012 2013 2014 2015 2016 2017


$10$23

$12$13 $23


$94

Linear Tech$14.8

ARM$31.5

$66.8

$29

AllOthers

Toshiba?$17.9

$11

Tran

sact

ion

Valu

e ($

B)


$777

$984 $950 $970

$299

$511

$366 $354

$897

$-

$200

$400

$600

$800

$1,000

$1,200

2009 2010 2011 2012 2013 2014 2015 2016 2017

Fina

ncin

g Ra

ised

$M

VC Investment in Fabless Semiconductor Startups


R&D Increase

Increase in venture capital funding of fabless semiconductor companies

Average$920

Average$382

Source: Global Semiconductor Alliance (GSA) , IMF, VentureSource & Mentor Graphics Analysis


Early Funding Greatly Increased in the Last 4 QuartersWorldwide Fabless Company Venture Capital Funding (1-3)

$142

$62 $61

$7$38

$0 $10 $18

$73 $72$40

$70 $55 $49$13

$39 $38 $20 $39 $45 $38 $40

$107

$298

$221

$566

$0

$200

$400

$600

Q11

2

Q21

2

Q31

2

Q41

2

Q11

3

Q21

3

Q31

3

Q41

3

Q11

4

Q21

4

Q31

4

Q41

4

Q11

5

Q21

5

Q31

5

Q41

5

Q11

6

Q21

6

Q31

6

Q41

6

Q11

7

Q21

7

Q31

7

Q41

7

Q11

8

Q21

8

Fina

ncin

g R

aise

d $M

Round 1Round 2Round 3

Source: Global Semiconductor Alliance (GSA) , VentureSource , PitchBook & Mentor Graphics Analysis


$2$4$8$25$25$41$70

$113$201$204

$237$274

$415$543

$0 $100 $200 $300 $400 $500 $600

Hardware Security SoCImage Processor

Video CompressionFlexible Transistors-TFT

Waveguide OpticsLED

Silicon PhotonicsMPU & MCU

Comm. High Speed / 5GSensors & MEMSAnalog & Power

MemoryCrypto Currency

AI & Machine Learning

Market Segments Funded 2012 – 2018 YTD ($M)

13 Fabless AI Companies Received VC Funding 2018 YTDWorldwide Fabless Company Venture Capital Funding (Total Rounds)

$249

$354

$168$200

$71 $73$121

$34

$119$135$73

$184

$62$110 $94 $101

$64 $70

$154

$66$125$149$136

$487

$293

$1,051

$0

$200

$400

$600

$800

$1,000

$1,200

Q11

2

Q21

2

Q31

2

Q41

2

Q11

3

Q21

3

Q31

3

Q41

3

Q11

4

Q21

4

Q31

4

Q41

4

Q11

5

Q21

5

Q31

5

Q41

5

Q11

6

Q21

6

Q31

6

Q41

6

Q11

7

Q21

7

Q31

7

Q41

7

Q11

8

Q21

8

Fina

ncin

g R

aise

d $M

Round 1 Round 2 Round 3 Round 4 Round 5 Round 6 Round 7 Round 8 Round > 9

2018 YTD had 11 Rounds with undisclosed $’s

AI, Deep Learning Portion of Funding - 2018 YTDAIMotive Gmbh, $38M – ADAS Acceleration ChipBeijing Intengine Tech – $30M – AI chips for end-point devices in multiple industriesHailo Technologies – $12.5M – AI chips data center edge devicesKneron, $18M – AI Network Processor (NPU)Metawave, $10M – AI engine for autonomous driving radar chipMythic Inc, $40M – IPU for adding intelligence to any deviceNextVPU, $2M – computer vision chips for robotics, unmanned vehiclesSyntiant, $5.1M – Neural Decision Processors (NDP)-reducing data movementTenstorrent, $0.5M – Deep learning processorXanadu Quantum Tech, $9M – Quantum processor chip using Silicon PhotonicsHangzhou Fabu Technologies, $Undisclosed – AI adaptive chip architecture for ADASCambricon, $Undisclosed – Processor for AI, datacenterTachyum Inc, $Undisclosed – Processor for AI, data center and HPC platforms



Chinese Government Incentives for Semiconductor Investment

$20 billion China Integrated Circuit

Investment Fund(Government Backed)

$97 billionin Private Equity,Local Governments,Regional Governments

Source: PWC 2014

First Fund - 2014 IC growth of 22% after CAGR of 3%

R&D Increase


China investments in semiconductor


Chinese Government Incentives for Semiconductor Investment


R&D Increase


China investments in semiconductor

$47 billion China Integrated Circuit

Investment Fund(Government Backed)

Source: Wall Street Journal, May 2018

“Big Fund” - 2018

“China is Poised to announce a new fund of 300 Billion yaun ($47.4 Billion) to spur development of semiconductor industry…”

Wall Street Journal, May 2018

15 WCR, DARPA ERI July, 201815

Round 1, 2 and 3 Locations

$142

$62 $61

$7$38

$0 $10 $18

$73 $72$40

$70 $55 $49$13

$39 $38 $20$39 $45 $38 $40

$107

$298

$221

$566

0

100

200

300

400

500

600

700

Q112

Q212

Q312

Q412

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Q115

Q215

Q315

Q415

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

Q218

Repo

rted

VC

Fund

ing

($M

illio

ns)

Others

China

Israel

Texas

Canada

Massachusetts

Europe

California

WCR, GSA June 4, 2018


China Pulls Away in Last Four QuartersWorldwide Fabless Company Venture Capital Rounds (1-3)

China 2.8X US in 2018 YTD FundingWorldwide Fabless Company Venture Capital Rounds 1-3

WCR, GSA June 4, 2018


0

100

200

300

400

500

600

China US Europe Other

Repo

rted

VC

Fund

ing

($M

illio

ns) 2012 2013 2014 2015 2016 2017 2018 YTD

2.8X

China Semiconductor Initiative Has Accelerated New Startup Formation

15 17 20 23 27 32 41 56 62 76 98

200

389463 471 479 488 491 483 472 485 495 518

583

681 715

1,3621,380

0

500

1,000

1,500IC Design Enterprises in China

Source: China’s Impact on the Semiconductor Industry, PWC and TrendForce,2017 Data Point is from EE Times Asia article dated November 28, 2017


China chip segments

19 WCR, DARPA ERI July, 2018

> 500 0.4% 100-500,

9.8%

50-100, 22.1%

< 50, 67.7%

2006Employment

> 5006.1%

100-500, 43.3%

50-100, 33.2%

< 5017.4%

2015Employment

Total Enterprises = 479 Total Enterprises = 715

China’s Fabless Companies Have Become Much Larger


Source: China’s Impact on the Semiconductor Industry: 2016 Update, PWC

“Artificial Intelligence Heavyweights”, July 1986A Technology that Arrived Before Its Time


Lack of big data to analyze— No Internet or IoT to collect sizable data sets

Limited computing power— Limitation of traditional computer chip architectures

Need for more advanced algorithms

Lack of ‘killer’ applications to make money

Reasons for AI Adoption Delay in the 1980s


Lack of big data to analyze— No Internet or IoT to collect sizable data sets

Limited computing power— Limitation of traditional computer chip architectures

Need for more advanced algorithms

Lack of ‘killer’ applications to make money

What’s Different Today?All these limitations are going away


What’s Driving Semiconductor Design Starts & Innovation Today? And what new innovations will this momentum lead to in 2030?


Artificial intelligence/machine learning

5G

IoT

Sensor fusion

Security

System emulation

Memory technology


5G

IoT

Sensor fusion

Security

System emulation

Memory technology



The Gompertz Curve

Benjamin Gompertz, 1825 Mathematical model for time series

— Growth percent is fastest at the start and slowest at the end

Example— Growth of tumors— Population growth— Mobile phone uptake— Market impact in finance

y = a e

be-ct

time

y


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Global Subscribers Forecast

Total Cell Phone SubscribersGompertz Forecast 2016

Cellu

lar

Subs

crib

ers

(Bill

ions

)

Source: International Telecommunications Union

Source: The Guardian


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Global Subscribers Forecast 1997

Total Cell Phone SubscribersGompertz Forecast 1997

Cellu

lar

Subs

crib

ers

(Bill

ions

)




0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Global Subscribers Forecast 2016 Forecast 1997

Total Cell Phone SubscribersGompertz Forecast 1997 vs. 2016

Cellu

lar

Subs

crib

ers

(Bill

ions

)




0

50

100

150

200

250

300

350

400

Server Unit Shipments Forecast

Data Center Processing Demands Have Grown for Decades Servers S-Curve

Server Semiconductor Consumption as a Percentage of Total Semiconductor Revenue 2015 … 4.2%

Cum

ulat

ive

Uni

t Vol

ume

(Mill

ions

)

Sources: Gartner Group, IC Insights & Mentor Graphics analysis


+30% Commercial Server Growth after 4 Years of 2% CAGR(Recent 4 Quarters/Prior 4 Quarters)

$11.8$12.6$12.6

$14.9

$11.1$12.3$12.1

$14.3

$11.0$12.7$12.8

$14.5$12.8$13.5$13.4

$15.3

$12.4

$14.8$14.2$14.6

$11.8

$15.7$17.0

$20.7

$18.8

Rev

enue

$B

illio

ns

Commercial Server Revenue ($ Billions)


New Breed of Applications Creating Demand for Innovative New Custom Architectures

Artificial intelligence/machine learning— Pattern recognition

– Intelligent image processing– Audio, other senses

Block chain processing— Bitcoin mining— Provenance/Supply Chain

Management— Identity Authentication


AI/ML Requires Moving to the Next Level of Abstraction and Power Analysis

Market Drivers for High-Level Synthesis

Reduced Time To Market with good QofR

Late Changing Specifications

Reduce Verification and Debug Cost/Time

Require FPGA Prototype and SoC/ASIC

High Bandwidth and Cellular

Comm

Image Processing,

Video & Compression

Computer Vision and

Neural Computing



5G

IoT

Sensor fusion

Security

System emulation

Memory technology



Major Applications for 5G Video/entertainment delivery

— Next generation video and TV— Video to mobile— Video to broadband

Smart city systems Smart home/Building Augmented & virtual reality Mobile connectivity IoT and Industrial IoT Cloud computing/big data analytics Automotive telematics and autonomous drive (constrained)

Source: IMT-2020https://www.rfpage.com/applications-5g-technology/


Latency specifications of 1 msec

Peak throughput 10Gbit/s

Ultra low power

Enablement of new cloud-based apps— Such as factory gateways

5G system simulation


5G Is Stimulating a Plethora of Chip DesignsBut has challenging design problems


5G

IoT

Sensor fusion

Security

System emulation

Memory technology



Intelligence Flows Downhill Over Time

1960s 1980s 2000s

Dumb Terminals

Mini Computers Mini Computers

Personal Computers

Dumb Peripherals

2020s

Cloud

Gateways (Fog)

Edge Nodes (Mist)

Dumb Terminals


Complex but extremely cost-sensitive design, ultra low power and ultra high volume— Sensor with MEMS— N-Zero power— A/D converter— Analog signal processing

IoT Intelligent Edge Device

— Digital interface— Radio (RF communication)— Microcontroller

Accelerometer

MicrocontrollerST Microelectronics / STM32L151C6ARM Cortex-M3 processor

Battery Charger ICTexas Instruments / BQ24040

Bluetooth ICNordic Semiconductor / nRF8001

Source: ifixit.com





5G

IoT

Sensor fusion

Security

System emulation

Memory technology

Source: Mentor Analysis

59 120

1142

119

346 Companies Developing Electric Cars and Light Trucks144 Companies Announced Autonomous Drive Programs

Automotive Disruption on the Horizon?


Autonomous Drive Stimulating Design ActivityVehicle Architecture Levels 1 to 5

Centralized raw data fusion


HIGH SPEED SENSOR LINK CONTROL AND COMMUNICATIONS LINK CONTROL AND COMMUNICATIONS LINK




5G

IoT

Sensor fusion

Security

System emulation

Memory technology

Counterfeiting

Safety

Fraud

Government policy

Likely Stimuli for New ApplicationsCounterfeit Known Good Part





5G

IoT

Sensor fusion

Security

System emulation

Memory technology

Sense

SensorsTraffic Data

SystemAlgorithms

Ad-hoc TLM, D

PI Interfaces FMU MODELS

FMI

FMI

Mechanical and dynamic simulation

5000+ ModelsCustom Models

AMESimCompute: Veloce Strato

Image Processing

Powertrain Controller

Sensor Fusion

Safety & Security

Controller

Actuate

Transmission

Engine

Braking

Steering

Co-development of AUTOSAR software and ECU hardware together with mechanical system actuators, sensors, and traffic scenarios

Automotive EmulationIntegrated System of Systems Framework to Simulate and Verify Multiple ECUs


Both Electrical and Mechanical Must Be Verified Virtually

Perspective Update

Scenario

Auto Dynamic State

Actuator ControlSensor Signals

D&V PlatformVeloceHYCON

CALYPTOFor CNNs

Simcenter Prescan

Simcenter Amesim

Sensor Fusion

Accident Database

Powertrain Model Chassis Model



5G

IoT

Sensor fusion

Security

System emulation

Memory technology



45.0%

78.0%

92.0%97.0% 99.2% 99.7%

1990 1995 2000 2005 2010 2015

Memory as a Percentage of All Transistors

Source: VLSI Research, 2016

Memory Now Dominates Transistors Manufactured


1.0E-10

1.0E-09

1.0E-08

1.0E-07

1.0E-06

1.0E-05

1.0E-04

1.00E+15 1.00E+16 1.00E+17 1.00E+18 1.00E+19 1.00E+20 1.00E+21 1.00E+22

Reve

nue/

Bit (

$Nan

o)

Cumulative Transistors Shipped

Learning Curve CAGR 1995-2015DRAM & FLASH ……... -39%Remaining SEMI …..… -21%

Semiconductor (excluding DRAM & FLASH)

DRAM &FLASH

Without Memory, the Semiconductor Industry is Not Continuing on the Long Term Learning Curve

Source: VLSI Research 2016, Federal Reserve Note: Revenue adjusted for Inflation… 1954-2015


1.0E-10

1.0E-07

1.0E-04

1.0E-01

1.0E+02

1.0E+05 1.0E+07 1.0E+09 1.0E+11 1.0E+13 1.0E+15 1.0E+17 1.0E+19 1.0E+21

Reve

nue/

Bit

Cumulative Transistors Shipped

Learning Curve CAGR 1995-2015DRAM & FLASH ……... -39%Total Semiconductor…..… -37%

Semiconductor

DRAM &FLASH

Source: VLSI Research 2016, Federal Reserve Note: Revenue adjusted for Inflation… 1954-2015

Memory, Instead of Logic, Transistors Keep Semiconductors on the Long Term Learning Curve


3D NAND Allows Memory to Scale Faster than Logic or SoC’s

Source: IC Insights, McClean Report, 2016


0.E+00

5.E+21

1.E+22

2.E+22

2.E+22

3.E+22

3.E+22

4.E+22

4.E+22

5.E+22

5.E+22

Total Transistors Forecast

0.E+00

2.E+20

4.E+20

6.E+20

8.E+20

1.E+21

1.E+21

1.E+21

2005 2010 2015

Cum

ulat

ive

Tran

sist

or U

nit V

olum

e


y = a ebe

-ctTotal Transistors Gompertz Curve


0.E+00

5.E+21

1.E+22

2.E+22

2.E+22

3.E+22

3.E+22

4.E+22

4.E+22

5.E+22

5.E+22

Total Transistors Forecast

Cum

ulat

ive

Tran

sist

or U

nit V

olum

e

Today

Silicon Transistor Growth Stalls

Need an Alternative to the Silicon Transistor ‘Switch’ Before 2030



Non-von Neumann Computer Architectures Will Improve Processing Speed, Reduce

Power and Integrate More Memory

Source: ISSCC 2014 Trends - 61st ISSCC 2014, February 2014

Memory improvements— Increased capacity— Hierarchical memory— Memory cell connectivity— Invariant memory

Processor architecture improvements— Parallelism— Error tolerance— Continuous feedback— Integration with memory

Requirements for Brain-Like Pattern Recognition


Who Will Create the Designs and Develop the Technology?

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thou

sand

s of

ann

ual g

radu

ates

First University Degrees in Natural Sciences and Engineering

China United States EU-Top 8 Japan Taiwan

Source: National Science Foundation 2018 Science and Engineering Indicators


Who Will Create the Designs and Develop the Technology?

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000 Earned Doctoral Degrees2014 or Most Recent Year

Source: National Science Foundation 2018 Science and Engineering Indicators


Source: OECD Science, Technology and Industry Scoreboard 2017


Global Share of Top Cited Scientific Publications 2016As a percentage of world’s top 10% most cited publications

0

5

10

15

20

25

30

35

EU28 USA CHN GBR DEU ITA FRA JPN CAN AUS IND ESP KOR NLD CHE

Current acceleration in design starts and startups will generate semiconductor momentum for the next decade

New apps at the leading edge of technology— Pattern recognition – AI/ML/automotive— 5G enabled capabilities— IoT and IIoT — Sensor fusion— Security— System emulation

Memory technology as a key driver for brain-like architectures— Will need a new memory cell around 2025 — Learning curve continues

Growing and training the developers of semiconductor technology/design for new applications



president & ceo mentor, a siemens business · acceleration of semiconductor revenue growth ic...

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