Ed Sperling

Ed Sperling, None

3/19/2009 @ 6:15PM

Why Sun Can't Remain Independent

You can blame the still-brewing deal between IBM and Sun Microsystems on the move toward cloud computing, the emergence of fresh competitors like Cisco or the world’s economic collapse. But you might be better off blaming Moore’s Law.

Moore’s Law, the canonical rule in the chip industry that has pushed companies to roughly double the processing power on a chip every two years, means that the number of transistors that now fit on a piece of silicon has exploded. Chi-Foon Chan, president and chief operating officer of Synopsys , which makes software to design chips, says the current generation of Intel Core2 Extreme processors has 820 million transistors. A Nvidia graphics chip has a mere 505 million transistors, he notes.

Get all those components onto a chip, and a lot of elements start to shift. “The key is integration,” Chan says. “The ecosystem has to change.”

As the sub-chip components on a chip shrink, a huge amount of space gets freed up, at least in relative terms, on even the smallest silicon. And available real estate on chips can always be used for something else–typically, additional functions.

Take a smart phone, for example. A decade ago, a cellphone was just a phone, and a bad one at that. The average connection speed of even the fastest consumer device was 56 kilobits per second. Fast forward 10 years and the latest Qualcomm chip communicates at 7.2 megabits per second. That same chip also packs in more memory and processing power than most personal computers had a decade ago, along with lots of other features like e-mail and global positioning. And it sells for less money.

“The megatrend is all about intelligence added to devices,” says Jonathan Luse, director of marketing for the low-power embedded processor division at Intel. “What we’re seeing now is all kinds of intelligent devices. The next wave will be connected devices.”

That will require more functions, more space for the power-saving features that can save battery life or power, and make the interactions between all of these pieces enormously more complex. Chips used to have a single voltage. Now they have multple voltages. Some parts of the chip need to be powered on all the time. Others can be in standby mode, while still others can be turned completely off.

Balancing these demands is not a trivial engineering feat. And as companies strain to deliver new products in shorter cycles, they need more engineers and bigger development budgets to get the job done.

Instead of spending $39 million to design an advanced chip, as companies do now, design costs alone for chips are expected to increase to $120 million over the next six years, or three revs of Moore’s Law, says Simon Bloch, vice president at Mentor Graphics , another maker of software for developing chips. You have to sell a lot of smart phones to recoup those kinds of costs–and you have to squeeze as much cost out of the supply chain as you possibly can.

That includes everything from software to fewer components, meaning pennies can be shaved off every device by eliminating things like external capacitors and memory modules and putting them into the chip itself.

Complexity in chips causes gyrations at the software level, as well. The added cost of developing chips has pushed software into the hands of chip companies. If they’re not responsible for developing the software, they are required to make sure it works on their hardware. While that has eliminated some of the finger pointing about whose problem it is, it also has raised the cost of developing chips even further.

The result is fewer vendors can afford to remain competitive, fewer companies can afford to push out new products and even fewer companies can boldly go where no companies have gone before. It costs too much.

In Sun’s case, it could no longer get to the volume levels needed to sustain its development costs. Neither could Hewlett-Packard , which is why it no longer makes its own computer processors. It buys them from Intel, which is something that Cisco can do, too.

See Also:

A Rorschach Test For IBM And Sun

Why IBM Wants Sun Now

IBM: Tech’s Cash King

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