From time to time, I’ll get a presentation from a company announcing a new product, usually a new chip, that includes a statement like this:

“We’re the only semiconductor maker with a full line of FPGAs, from the smallest, most cost-efficient devices to the most advanced, leading-edge devices.”

or this:

“We’re the only full-line semiconductor supplier, offering everything from diodes to the most advanced processors and FPGAs.”

Perhaps these companies are channeling Walter Brennan, who often said “No brag, just fact,” in the title role of the old TV western series “The Guns of Will Sonnett.” The series ran from 1967 to 1969 in the U.S., and Brennan was a familiar actor who had a bunch of movie and TV series credits to his name.

When I hear statements like the above from semiconductor companies, I’m sure that I disappoint them by my total lack of enthusiasm for this statement. Semiconductor companies have tried for decades to present themselves as full-line suppliers, where “full-line” means different things to different people. Full-line semiconductor suppliers from the 1960s and 1970s that offered everything from diodes and transistors to ICs included Fairchild Semiconductor (now part of ON Semiconductor), Motorola’s Semiconductor Products Sector (now split between ON Semiconductor and NXP), Philips Semiconductor (now NXP), Siemens’s semiconductor division (now Infineon), various incarnations of SGS (now STMicroelectronics), and Texas Instruments. However, the semiconductor business has become so diverse that no one company can make everything. There are now so many fascinating niche semiconductor applications that often require unusual process technologies, such as silicon on insulator (SOI) for low power applications, gallium arsenide for RF applications, and silicon carbide for power devices. No semiconductor company has the resources to fill all these niches.

Certainly, this aspiration to be seen as a full-line vendor makes some sort of sense from a business perspective. After all, the more parts one supplier can capture on a circuit board, the bigger the served available market (SAM) for that vendor. However, it is rare for one supplier to offer the best device for every “socket” on the board. (Sorry, the use of the term “socket” is an old one, and we don’t socket devices any more as a rule, but the habit lives on.)

An infographic from the business information consolidator Quartr brought this home for me. The infographic shows the three major circuit boards in an Apple iPhone 15 and it lists the brands for many of the major chips used on these boards.

Here’s the Quartr infographic:

Apple’s iPhone 15 uses chips from many suppliers. Image credit: Quartr

The iPhone 15’s logic board revolves around Apple’s own A17 Pro processor, and that processor series gets plenty of press. Apple set a precedent for system companies when it started making its own processors. This is not a new practice. The semiconductor industry is filled with examples of systems companies such as IBM, AT&T, and HP that started developing specialized semiconductors for their own systems designs. Amazon and Meta are more recent examples. However, none of these systems companies tried or are trying to make every required chip.

The iPhone 15 logic board shown in the above image also contains chips from Bosch, Broadcom, Cirrus Logic, Renesas, SK hynix, ST, and Texas Instruments. The memory board incorporates chips from Cirrus Logic, Kioxia, NXP, and Texas Instruments. The RF board incorporates chips from Broadcom, NXP, Qualcomm, Qorvo, Skyworks, and ST. This menagerie of chip suppliers illustrates the emptiness of the “full-line supplier” assertion and is a very familiar situation to any systems-level design engineer. You try to pick the best component for a given application, and no company makes the best devices for every possible niche.

Standard interfaces have paved the way for democratic system design, and Intel stands out as one company that has done the most to foster this democracy by developing or leading the development of universal interface standards such as PCI, PCIe, and the many flavors of USB. Other near-universal interface standards include the many flavors of Ethernet, the Mobile Industry Processor Interface (MIPI) standard and its closely allied Camera Serial Interface (CSI), I2C, I3C, and SPI, while the specialized DDR interface standards allow for the mixing and matching of DRAM DIMMs. The industry abounds in standard interfaces that permit the easy mixing and matching of ICs from myriad semiconductor makers.

However, business considerations sometimes overshadow the egalitarianism of interface standards and act as a counterweight to the democracy of system design. At least one current semiconductor company CEO is famous for his extremely aggressive pricing tactics. This individual reportedly would meet with a customer, look at their board design, and inform them of the sockets that he expected to win. These expectations would then become a significant component in some bare-fisted price negotiations.

Government agencies take a dim view of such strong-armed tactics. In 2010, Intel agreed to a Federal Trade Commission (FTC) consent order that included language prohibiting Intel from using “threats, bundled prices, or other offers to exclude or hamper competition or otherwise unreasonably inhibit the sale of competitive CPUs or GPUs.” The company was fined by the European Commission (EC) in 2009 for similar behavior. In 2022, the European Union’s (EU) General Court partially annulled the EC’s 2009 fine, but it confirmed that Intel’s had abused its dominant market position under EU competition rules, so the EC imposed a smaller fine.

Intel is not the only technology maker under the scrutiny of the FTC or the EC. It’s merely the most visible recipient of the FTC’s attention. In 2021, the FTC approved a final order that prohibits Broadcom from entering into certain exclusivity or loyalty agreements with customers for the supply of key chips used in broadcast set top boxes and DSL, and fiber broadband devices. The order also prohibits Broadcom from conditioning access to these chips based on exclusivity or loyalty agreements. These agreements and rulings do affect corporate behavior when they have teeth.

In my experience, design engineers are largely buffered from these sorts of business shenanigans, which are in no way limited to semiconductors and the electronics industry. However, buyers and executives are fully immersed in this world because pricing and purchasing are two of the intersection points between the technology and business sides of semiconductor manufacturing, marketing, and sales. These interface points make things messy, messier than engineers might prefer, but they’re an ever-present aspect to business in general, so we’re stuck with them for as long as people are calling the shots.

References:

Peter Westberg, 10 of Our Current Favorite Visuals, Quartr, June 20, 2024

FTC Settles Charges of Anticompetitive Conduct Against Intel, August 4, 2010

Antitrust: Commission re-imposes €376.36 million fine on Intel for anticompetitive practices in the market for computer chips, September 22, 2023

FTC Approves Final Order Requiring Semiconductor Supplier Broadcom to Cease Its Anticompetitive Conduct, November 4, 2021