There is a continual growth in the Semiconductor industry, however, it is one-sided. The opportunities for new players with niche products are turning limited as they fail to show any technology differentiation. To adopt core differentiation, the cost factor involved for the companies is expensive. The expense at times reaches $70 million before a startup can gauge its success. So, they turn monotonous using the same semiconductor technology, subset libraries and EDA (Electronic Design Automation) tools. This becomes an advantage for the established bigwigs, who can divulge more capital to gain traction.

To bring cost effectiveness to enrich the startups, there is a new revival in the market to control the cost in the memory portion of the circuit, implying better memory and performance at low cost. The cost factor aside, three mega-shifts are witnessed in the market. Firstly, the consumer products from TVs, cam-corders to VCRs are increasingly taking to high-definition, and the semiconductor industry is churning out solutions to help the devices to support high definition through coding and decoding. Secondly, the market is gradually moving towards video over Internet protocol (IP) and this demands a lot of innovation in the semiconductor arena. Finally, there is an access to high level bandwidth. These trends tend to complement each other as with the use of higher bandwidth through wired and wireless technologies the Video Over IP becomes possible, and VOIP also requires high-definition.

As new trends gain momentum, the overall development turns too expensive, and the challenge lies in becoming a low cost operation, than being a capital intensive one. Cutting edge technology and overseas operation can steer the companies towards low cost operations. So, to banish the disadvantage, the startups have to refurbish the technologies, which unveil the need of cost effectiveness.

Prakash Agarwal Co-Founder and President, CEO of iKoa