In the good old days, companies like Intel, designed, developed and produced their own microprocessors. The details and designs of those chips was held close to their chest like your Gramma saved the secret behind her special chocolate chip cookies.
The market has evolved and those who produce the chips are not necessarily the ones who design and develop them. The design and development of the chips is freed from the high capitalization costs of production and the much more valuable asset, Intellectual Property or IP, is kept.
Small firms can get into the design and development space without high costs. With the economies of scale not an issue, the proliferation of firms with their own IP can grow at a fast rate.
With every new standard, it takes a long time for one standard to ultimately be accepted as “the one”. Remember, VCR versus Betamax. The Compact Disc format went through this standard setting process too. Just about every technology has different methodologies. It takes a long time before one methodology to become the accepted methodology of the market place.
Last fall Nvida, published the specifications of the design of their chips or IP. Prior to this, this was not the normal process. But, with this change, Nvida is offering the designs to anyone who wants to design with Nvida’s processors. It is sort of like Linux. It is basically “open source” code. By doing so, Nvida can foster many smaller startups who use the “open source” microprocessor designs. This whole process would tend to “wed” those designers to Nvida’s design. Ultimately, it may should give Nvida a “leg up” on being the accepted base chip.
Sounds to me like a pretty smart move to position Nvdia as the standard setter. What do you think?!
