Microprocessor Startup Apocalypse?

This past week, I was a participant in the annual Hot Chips symposium at Stanford University. As part of the organizing committee, I help the conference with PR, including press and analysts. The conference is a mix of academic and commercial presentations, but the general leaning of the conference is more commercial – especially after the demise of the Microprocessor Forum.

This year’s attendance was up sharply from 2009 and pretty much matched 2007 and 2008. That’s a healthy sign for the business – companies are spending money to send people to conferences. But there’s a dark side to this year’s conference – paper submissions was down. Many of the papers this year came from stalwarts AMD, IBM, and Intel. There were a few new companies, but one presenter’s company (Tier Logic) had already been declared dead by Microprocessor Report (July 19th edition - $$)

And on the same day the conference kicked off, Jim Turley, editor in chief of Microprocessor Report, released an editorial on the futility of new microprocessor startups. With a title of “How to Blow $100 Million,” the editorial goes on to develop a rule of thumb that a new microprocessor start-up needs about $100 million in order to fully launch the company. After the idea rattled off a few people, the general consensus that if the new microprocessor requires extensive tools support (compilers, debuggers, etc), that $100 million is not ridiculously high.

And there is the problem – how can you raise a $100 million form VCs these days, when the risks are high, the returns questionable, and many other “sexier” markets (like green tech, social media, location aware services) are out there. A look at recent microprocessor start-up is not encouraging: Raza Micro (where a spent a few months) was sold to Net Logic, PA Semi was sold to Apple, Intrinsity was also sold to Apple, Montalvo was shuttered, Stream Processor Inc. (SPI) is no more, and the list goes on.
I find it sad and disheartening that the microprocessor business is undergoing such major consolidations and innovative new architectures will likely not get funded. The next new architecture may come from the emerging powers such as China. We saw the Chine “Godson” processor evolve rapidly until now we see a are talking about a processor with a wide SIMD unit, running over 1GHz that soon could be the foundation of a major supercomputer. They even talk about an x86 emulations software layer supported by special instructions. With the support of the government and access to a competitive foundry, I wouldn’t underestimate where there program could be a few more years.