After years of relatively stable growth and new product introductions in the Field Programmable Gate Array (FPGA) market sector, the industry has entered into a new era of dynamic change driven by industry consolidation coupled with a breakdown in Moore’s Law. The consolidation along with a very high barrier to entry, has seen approximately 30 companies fail or be acquired, leaving only a handful of players to compete for the $4.5B FPGA market. This consolidation has continued with Intel’s acquisition of Altera in December of 2015. Industry rumors are that Xilinx will be next with possible suiters being Broadcom, QUALCOMM or IBM. The breakdown in Moore’s Law is changing the value proposition of FPGAs. FPGA vendors can no longer achieve all three benefits of improved performance, power, and most importantly cost with each new silicon process node. This has forced vendors to make difficult tradeoffs in terms of device features, power, and performance to hit the sweet spot of specific markets and applications, leaving smaller markets forced to use mature devices or pay a premium for features they may not need. The increased cost for smaller geometries has also forced FPGA vendors to extend the lifespan of existing technology families through new variations of more mature processes and increasingly rely on market-optimized devices with dedicated hard IP to achieve growth. As costs have risen, the vendors are moving to market-specific platform offerings that combines hard and soft processors, Digital Signal Processor (DSPs), and intellectual property (IP), along with highly tailored I/O interfaces and memories to provide programmable application specific offerings to compete with off-the-shelf devices manufacturers. Techonomics Research combines a financial analysis with a technical perspective that considers how each disruptive market event will affect a company’s overall ability to compete and grow revenue in high-growth markets. Our market analysis provides a unique perspective, grounded on the technical merits of a company’s product line vs competitive alternatives to assess growth potential. Current annual revenue for the total FPGA business is roughly $4.5 billion lead by wireless and wired communication and Data Center which is attributed to 40-45% of the market, however we expect the FPGA market to grow at a CAGR of 6% per year through 2022 growing to $6.5B as FPGA vendors enter new markets, such as Data Centers, and find more effective design methodologies to compete with Application Specific Integrated Circuits (ASICs), Application Specific Standard Products (ASSP), Central Processing Units (CPUs), Graphics and Network processors in markets such as wireless, IoT, Data Center and Advance Driver Assistance Systems (ADAS).
Research done by Tom Feist.