NEC, Cypress enter FPGA market

Electronic News, June 8, 1992 by Robert Ristelhueber

SAN JOSE, CALIF. -- NEC Corp. and Cypress Semiconductor last week elbowed their way into the field programmable gate array market even as Motorola put the finishing touches on its own second-source arrangement.

Cypress signed a pact with QuickLogic Corp. to make and sell FPGAs based on the latter's architecture. NEC, for its part, will market arrays designed by another startup, Crosspoint Solutions, and could expand the deal to include joint development and manufacturing.

Motorola's FPGA plans will be detailed later this month or in early July, but a spokeswoman confirmed that Motorola is close to concluding a deal with another company, which she declined to identify.

Motorola is known to have approached most of the existing FPGA suppliers, including Crosspoint, about second-sourcing. A Hitachi executive recently said his company was also talking with Crosspoint (Antenna, May 18). Vacit Arat, director of marketing at Crosspoint, last week declined comment on whether his firm was discussing a deal with either company.

"We've talked to quite a few companies in the U.S. and Japan, and we expect to bring on additional manfacturing capacity," he said.

For the moment, NEC will act solely as a sales and marketing vehicle for Crosspoint's FPGAs. Mr. Arat said NEC was a major gate array force in Japan, "and this will give us access to a very large market." The door remains open for the two companies to jointly design new parts, he said, and "We would certainly be very pleased if NEC becomes a foundry in the future."

At present, Performance Semiconductor serves as Crosspoint's foundry as part of a second-source arrangement. Tom Longo, president of Performance, said his contract with Crosspoint gives his company exclusive North American rights to 4,000- and 8,000-gate FPGAs built with the Crosspoint architecture, and exclusive worldwide rights to all the Crosspoint parts running on 3.3V power supplies. "NEC being in the market is fine as long as our rights are not abrogated," Mr. Longo said.

Crosspoint only recently began shipping a 4,200-gate part, its first. Mr. Longo said the 12,000-gate device will be shipped late this year, and the 8,000-gate part early in 1993.

Brent Dichter, strategic marketing manager for ASICs at NEC Electronics, said the deal with Crosspoint will enable NEC to offer a full range of ASICs. "They can use the Crosspoint parts for prototyping and initial production, then move into masked gate arrays or standard cells."

NEC chose Crosspoint's line because its FPGAs use a fine-grained architecture similar to that of gate arrays, and the design tools used by the companies were largely compatible. "It will mean a smooth transition from FPGAs to gate arrays and standard cells," Mr. Dichter said.

ASCII Corp., an investor in Crosspoint, will continue to act as a distributor for the company in Japan. "They were instrumental in putting together the deal with NEC," said Mr. Arat.

Cypress' deal with Quicklogic includes a multi-million dollar equity investment, which will give Cypress a stake of less than 10 percent in the startup. The investment was made "at a premium relative to their last funding in order to cement the relationship," said T.J. Rodgers, president of Cypress. "It sends a message to everybody that these are our partners, not our competitors."

He was quick to add that despite the agreement to jointly develop circuits, technology and design tools, the two firms will compete in the market and set prices independently.

David Laws, president of QuickLogic, said his company began shipping its first products last August, and is reaching volume production this year. Asked about his company's sales and earnings, he said "I wish I could say we were making a profit," and estimated annual sales to be about $5 million.

Cypress' investment follows a $7.5 million cash infusion made in January by QuickLogic's investors, which include Sequoia Capital; Sutter Hill Ventures; Technology Venture Investors; U.S. Venture Partners; Vertex Management; Burr, Egan, Deleage & Co.; and Morganthaler Ventures.

Cypress will begin selling its first FPGAs late in the fourth quarter. It will resell QuickLogic's software at that time, and begin marketing its own software early next year.

QuickLogic last year signed a development and foundry pact with VLSI Technology. Mr. Laws said VLSI will continue to act as a foundry and has the rights to use the QuickLogic designs in certain instances.

Mr. Rodgers said the pact with QuickLogic will complement Cypress' existing arrangement with Altera, under which Cypress second-sources the MAX family, while Altera owns part of Cypress' wafer fab in Round Rock, Tex. "This FPGA is really a different animal than high-density PLDs," he said. "We wouldn't want to impact the Altera relationship. There are a few facets where they compete, but in general they're complementary."

But Rodney Smith, president of Altera, said that his company's arrangement with Cypress was ending with the MAX 5000 product, and would not be extended to the MAX 7000 line. "We didn't want to have too many of our parts sourced by one company. It was never an issue for serious discussion."