Businessmodel of eSilicon

Customer Segments

eSilicon has a niche market business model, with a specialized customer segment. The company targets its offerings at semiconductor companies, integrated device manufacturers, original equipment manufacturers, and wafer foundries.

Value Proposition

eSilicon offers six primary value propositions: accessibility, customization, convenience, innovation, performance, and brand/status.

The company creates accessibility by offering a broad range of options. It can provide chips for a wide variety of end markets, including Computer/Communications, Consumer (particularly smartphones), Medical, Automotive, Industrial, Integrated Devices, and Internet of Things.

The company enables customization of its offerings. Customers can approach it with basic ideas for the design of a chip. It then starts building on those ideas, coming up with the best possible design, and sending it into production. To facilitate this process, it maintains alliances with a wide variety of supply chain partners, choosing the combination that represents the best fit for a given product.

The company offers convenience by providing assistance at all stages of chip production, from concept to volume production. It also provides free, 24/7 access to an online platform called eSilicon STAR that enables clients to manage various activities, including IP browsing and procurement, quote generation, design virtualization, design optimization, and work-in-process tracking.

The company has a history of innovation. It essentially created the fabless semiconductor market. Further, it pioneered the value chain producer (VCP) model, which was established as an official market segment by the Global Semiconductor Alliance (GSA) in 2008.

The company has demonstrated strong performance through positive results, such as the following:

• It has a proven track record of first-time-right silicon across over 180 design tapeouts. The tapeouts span a broad range of technologies ranging from 16nm designs to 250nm.
• It can ship volume product to over 40 active clients at a time with minimal defects in the field. Its defective-parts-per-million performance has regularly been below 100 DPPM for all steps.
• It identifies product reliability issues at the qualification stage of each project. It has had no product reliability field failures that caused field failures in customer products. The company has established a strong brand as a result of its performance. It is the largest independent semiconductor design and manufacturing services provider in the world. It completes more designs per year than most of its customers – on average, it develops and delivers 20 chips per year. It has over 275 finished designs.

Channels

eSilicon’s  main channel is its direct sales team. The company promotes its offering through its website, social media pages, forums, symposiums, and conferences.

Customer Relationships

eSilicon’s customer relationship is primarily of a self-service, automated nature. Customers utilize its products and services while having limited interaction with employees. The company’s aforementioned online platform, STAR, allows clients to monitor the progress of chip design and production.

In addition, its website features a “Resources” section that includes self-help resources such as white papers, brochures, technical publications, product documentation, and videos.

Key Activities

eSilicon’s business model entails designing and developing its products and services for customers.

Key Partners

eSilicon outsources the manufacturing of its products to merchant foundries. Its primary foundry partner is Taiwan Semiconductor Manufacturing Company (TSMC). That said, as an independent semiconductor design and manufacturing solutions (SDMS) vendor, it can work with any foundry or IP supplier. It maintains partnerships in the following categories:

• Foundry Partners – Specific partners are TSMC, Global Foundries, Altis, CSMC, SMIC, TSI Semiconductors, UMC, LFoundry, Samsung, and Dongbu HiTek
• IP Partners – Specific partners are ARM, Imagination, Northwest Logic, Synopsys, True Circuits, Cadence Design Systems, Analog Bits, Dolphin Technology, Rambus, Semtech
• Assembly Partners – Specific partners are Amkor Technology, Ase Group, Kyec, Spil, and STATSChipPAC eSilicon also maintains eSilicon MPW University Services (eMUSe), a partnership program with academic institutions. Through the initiative, it supports university research departments in their design and development of custom integrated circuits by providing access to the STAR platform, off-the-shelf IP, MPW sharing opportunities, and monthly pricing deals on MPW production.

Key Resources

eSilicon’s main resources are its engineering team, which designs and develops its products and services, and its sales/marketing team, which promotes them.

As a startup it has relied heavily on funding from outside parties, raising $98.62 million from 11 investors as of July 2012.

Cost Structure

eSilicon has a cost-driven structure, aiming to minimize expenses through significant automation.

Its biggest cost driver is likely cost of goods sold, a variable expense.

Other major drivers are in the areas of research/development and product development, both fixed costs.

Revenue Streams

eSilicon has two revenue streams: revenues generated from sales of its products and related services. As its offerings are customized, sales staff must be contacted directly for pricing quotes.