How do you build a semiconductor company on something that's free?

Summary

The business of semiconductor design is pure intellectual property: the worlds most creative minds, building ideas that generate trillions of dollars of value. Without the minds and the ideas, the entire industry is worth almost nothing.If this business can’t own their IP there is no business. So why would anyone build a business that gave it all away? ShareI sat down with Daniel Schultz, founder of aesc silicon, who’s pioneering a new semiconductor business model based on open source principles. Daniel is bootstrapping his startup. The model is not entirely new: his approach mirrors Linux’s (Red Hat) success. The core IP is free (for others), but the idea is that the value comes from support, customization, and specialized services. Revenue comes less from the product, more in the support.Tim told us this (sorta), when we were discussing wafer.space’s success: similar to Linux, lots of users means lots of demand for improvement, and that ends up driving design and improvement faster than any traditional IP model could. If the success of linux is any indication, this could work.It’s early days for Daniel and the open-source silicon movement. But a customer is important for a business to survive . . . so who’s buying?Daniel points to verifiable security as the killer app: silicon that, because it’s open source through the entire design and manufacturing supply chain, it can be verified back-door free. Chips that have auditability (you can verify nothing was slipped into your design before it hit the fab) will have an edge in cryptographic engines must be open to be trusted.A growing source of potential customers is the increasing demand for custom chips from smaller companies. As more companies come up with more specialized chips, this has driven a benevolent cycle for fabless companies. Open source IP could drive that faster, with less time and money locked up in IP licensing. Daniel's bet is that falling tool costs (no Cadence/Synopsys seat) plus open IP lower the ...