product development methodology – kbp as a game-changer

Presenta)on at the 8th Workshop of the “IIPCC HK Chapter IP Workshop Series: IP’s Role in Entrepreneurship & Innova)on” (in HKSTP on April 17, 2015)

Prepared by: Al Kwok (郭灿辉) Governor & Co-‐founder, IIPCC Hong Kong Chapter Governor & Co-‐founder, HKIURCA (⾹香港產學研合作促進會) Member, HKSAR “IP Trading” Working Group

Governor & Co-‐founder, Savantas Policy Ins)tute President, CASPA (华美半导体协会) PRD Chapter Former VP & CIPO, NetLogic Microsystems (“NETL”)

Product Development Methodology - KBP 1

Product Development Methodology – Making Knowledge-based

Processors the Game-Changer!

Apr. 17, 2015

Acknowledgement n  Innovations in IC industry have always been

collaborative efforts. No single-effort superstars! n  I am indebted to my colleagues and co-workers at

NetLogic Microsystems (NM) for their assistances and supports to develop NM’s IP strategies and portfolio as well as the system of continuing innovations to make NM one of the best IC start-ups in history, making its Knowledge-based Processors the critical components addressing QoS in Information Age.

n  Special thanks to Dr. Norm Godinho and Dr. Varad Srinivasan.

Apr. 17, 2015 Product Development Methodology - KBP 2

Essence of Continuous Innovations n  Innovations – the Ideas, Inventions

n  Ideas can just be academic curiosities unless they are productized for the Benefits of Mankind - Values

n  Innovations have to be Collaborative for Ecosystem-building

n  Entrepreneurship – the end-to-end Process n  From a Concept to make it into a “Product” – Vehicle of Values n  What it takes to Execute the Teamwork to realize the dream

n  IP – the Direction, Strategy & Business Model n  What Goals and Sustainable Values we want to achieve with our

Innovations and Entrepreneurship?

n  Sustainable Development ó Continuous Innovations n  The continuous Learning cycles of Basic System of “Innovation

ó IP ó Entrepreneurship” driving the Progress of a Society n  Old things (practices and methods) have to be obsoleted to

make rooms for emerging new things! Learning Cycles!


AK comment: Considering the facts that NM is much less than 1/10 of the size (in revenue) of the other 9 top-ranking companies and much younger (<10 years old), it is a crowning achievement! Likewise, “ipIQ” rated NM’s portfolio the best for a medium size (~$100M) high-tech company worldwide in its “Patent Scorecard 2006” report with the 2nd highest CII (current impact index).

Mkt. Cap.: US$250M @ 2004 IPO => US$3.7B @ 2011 M&A (14.8X in 7 years = >46% CAGR)

(All multi-billion$ companies)

AK comment: Based on a portfolio of ONLY ~100 (high-quality) patents

Product Development Methodology - KBP 4 Apr. 17, 2015

Lifetime Achievement as its “Founding CIPO”:

(Killer Patents!!!) (Game Changers!!!)

IDT Founders’ Spin-off (Serial Entrepreneurs) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Al Kwok AMD AMD AMD A/I IDT IDT IDT IDT VTI QSI QSI QSI QSI QSI QSI Self PMC PMC NMI NMI NMI NMI #256 # 7 # 7 # 10

George IDT IDT IDT IDT IDT IDT Clon Laws Huang Frank Lee IDT IDT IDT IDT IDT IDT IDT PSI PSI PSI PSI PSI PSI PSI GVT GVT GVT GVT GVT GVT G/C Norm IDT IDT IDT IDT IDT IDT IDT PSI PSI PSI PSI PSI PSI PSI PSI Nova Nova NMI NMI NMI NMI NMI Godinho Chun Chiu IDT IDT IDT IDT IDT IDT IDT IDT QSI QSI QSI QSI QSI QSI QSI QSI QSI QSI QSI Q/I Mano HP HP H/I IDT IDT IDT IDT IDT QSI QSI QSI QSI QSI QSI QSI QSI QSI QSI Malwah Varad ? ? ? ?/I IDT IDT IDT IDT QSI QSI QSI QSI QSI QSI QSI QSI Nova NMI NMI NMI NMI NMI Srinivasan Jen Hong ? ? ? ?/I IDT IDT IDT IDT QSI QSI QSI QSI QSI QSI QSI QSI ? NY NY NY NY NY

Apr. 17, 2015 5 Product Development Methodology - KBP

n  Collaborative Innovations leads to Co-founders n  Entrepreneurs create their own jobs n  Serial Entrepreneurs are the major job creators and new

engines of GDP – treasure of a Knowledge-based Society n  IDT (CMOS) & NMI (KBP) enabling IT, impacting >>$10T GDP globally

The Big Picture for Product Development

Lead Customers’ Requirements => 2nd G => 3rd G =>…

Differentiating Value Creations => 2nd G => 3rd G =>…

Business Model => 2nd G => 3rd G =>…

Service/Product Roadmap => 2nd G => 3rd G =>…

Application/Technology Roadmap => 2nd G => 3rd G =>…

IP Portfolio Development => 2nd G => 3rd G =>… The next innovation ideas come from customers (CRE) & “Stress Tests” identifying (1)  The weak-links in product design & performance and scalability (2)  System (architecture) integrity and scalability (elasticity) issues (3)  The bottlenecks for scalability (technology and manufacturability roadmap) NetLogic Microsystems is a good benchmark for SMEs as innovators

Close collaboration between the customer (CRE) and the vendor Mission-&-Time Critical Requirements along Demand-chain



AK Comment: Need GM @ ~65% to sustain R&D efforts @ ~30% for continuous world-class Independent Innovation

Lead Customers’ Requirements (The Apps/Product/Tech Roadmaps

to Meet Them)


Apr. 17, 2015 Product Development Methodology - KBP 15 AK Comment: This shows NetLogic Microsystems’ product/technology/patent roadmaps meet market needs

Differentiating Value Creation ó Innovation n  Values (to Customers) to get paid - Maximizing

n  Performance/Power n  Max. performance at a low (specific) power

n  Performance => speed + functionalities (features)

n  Battery power for portability, anywhere and anytime n  Personalization

n  Quality/Reliability => High Yield too!! n  Food safety assurance is an universal pressing issue

n  Delivery => throughput time + logistics + zero waiting n  Just-In-Time + Mini. Process time + Mini. Handling time

n  Price => Priced according to values instead of costs n  Price = “Brand (Trust) + Emb. IP + Services” + Cost > 4X Cost

n  IP = “Brand (Trademark) + Embedded IP (Patents & Copyrights) + Pre-sale Design Win & Post-sale Services (Trade Secrets)”



NetLogic Microsystems IP Strategy - A “King-making” Methodology


IP as the Core Strategy from the Start n  I joined NM in 1998 after its re-organization as VP of Business Development

& CIPO, and later also VP of Operations n  Read NM’s first 2 (CAM) patent application files before deciding to join

n  Assessed NM’s potential to be the KING of parallel search engine n  Full commitment from the CEO/Chairman/Major Investor on IP n  Former colleagues from IDT and QSI (incl. CTO) - 6 out of 9

n  Hired experienced patent attorneys to expedite drafting patent applications n  The proper way to ensure high-quality patent generation

n  Hired a patent attorney as Director of IP in 6 months n  He became the Corporate Counsel (& CIPO) of NetLogic Microsystems

n  Complementary team building to hire top engineers in product, test & technology, and strategic vendor partnership

n  Set up Patent Award Incentive Program (3000 shares per patent) n  Formed Executive Patent Committee (Dir. of IP, CTO, CIPO)

n  Set up claim guideline to include all enabling elements and methods creating values to customers (cost, performance, quality, delivery…)

n  Reviewed and improved patentable ideas from inventors n  Decided what patents to file and foreign patent filings n  Prioritized killer patent filings that could block competitors n  Set IP strategic development direction based on customer feedback


Understand the Core Differentiation n  How fundamental is the idea? More the better!

n  Independent of technology? “Must-have” for intelligent? n  What position is it in the value-chain? Higher the better!

n  On top at the global system architecture level? Or H/W level? n  What values can it bring to the customer?

n  Mission-and-time critical? Improve its profit margins? n  How disruptive can it be? Exponential growth potential!

n  Whole new paradigm shift? Last forever? n  Can another technology/idea be its disruptor?

n  How basic is the invention? On “NDA” level? n  Its usefulness over time - invariant? Its lifecycle?

n  What is the required supporting ecosystem for its usefulness? n  What are the alternative/competing solutions?

n  What is its market share? Differentiations? n  How large the TAM can it serve now and future?

n  Demand driven by Moore’s Law and Metcalfe’s Law?


Anatomy of a Generic Problem-solving (Intelligent) Process Steps in an intelligent process

The cycle: Observe/monitor Analyse Decide Execute Focus: References/result Ref./result Action Action Constraint: Data (more the

better) Data (more the better)

Resources (less the better)

Resources (less the better)

Preferred mode of operation

Concurrent & real -time

Concurrent & real-time if

possible

Interactive & iterative (what if?)

Concurrent if possible

Time factor Parallel Parallel if possible

Algorithmic by nature

Parallel if possible

Preferred method:

Pattern recognition

Pattern recognition

Pattern recognition parallel-search engine is fundamentally superior to algorithmic one

Presented by Al Kwok as a vision in 1999

The NetLogic Microsystems’ core patent portfolio was fundamentally based on this core concept: how to perform pattern recognition better through parallel-search engines (including Layer 7 since then).


n  The basic DNA of intelligence is the ternary (“1” or “0” or “X”) CAM cell with the implementation of “don’t care” state in circuit by means of the Mask bit

n  2 memory cells, a comparator circuit to determine “Match” (i.e., basic intelligence) & a Mask bit to give a dimension of freedom (i.e., option)

n  Degree of intelligence <=> degree of possible options n  The ternary CAM (content addressable memory) becomes the basic building

block for parallel-processing engines/filters. n  KBP (knowledge-based processor) is essentially a massy array of ternary

CAM with some classification and prioritization circuits. n  SRAM that was avoided by IC manufacturers like plague has reborn into its

second life as high-value ternary CAM -- What an innovation! Discovering treasure in a junk yard!

A Fundamental & Useful Innovation! (2008)

1 1 Input bit = Ref. bit

1 0 Input bit = Ref. bit

Mask bit = 1 Mask bit = 0

Match bit

IP Value Assessment Criteria n  Factors driving valuation (based on share % of TAM)

n  The Strength of the patent (legal aspect) n  Scope, territories, claims, enforceability…

n  The Significance of the patent (technical aspect) n  How fundamental? Timelessness of its values n  Differentiating functionalities: Values to customers n  Competing solutions: need comprehensive benchmarking

n  The Usefulness of the patent (market aspect) n  Applications with respect to industry standards and ecosystems

n  Sunrise (emerging trends) vs. Sunset (displaced practices) n  Present state of market readiness (units shipped and growth rate) n  Differentiations against competition (market share) n  Customer/market acceptance: TAM and market share n  Average Selling Price of the product and IP value in the product

n  The Lifecycle of the patent (longevity aspect) n  The expiration date of the patent n  Emerging disruptive technologies against the patent



Hierarchy of IP Management

Source: VSI Alliance (IPPWP2 1.0)

Level 1

Long-term Growth (Market dominance)

Short-term Growth (Market share)

Profitability (Within the domain)

Cost-effectiveness (Within the domain)

Increasing capabilities to affect the future

Each level of IP Management builds on the foundation of the lower levels


Focus for Innovation n  Proper SIP focus for design-house start-ups:

n  System architecture and interface n  New system architecture/function(s) n  New interface scheme for higher I/O data rates

n  Performance (chip level): =/>100X improvement n  New functions n  New architecture: chip and block level

n  Power/Voltage reduction n  New power management scheme n  New architecture: chip or block level

n  Density (feature size reduction) n  New array architecture n  New storage element


Valuable Patent Portfolio Patent # Title matter Type Elapsed # Claims Yearly

Filing Issued Days Total

1 6,199,140 Multiport CAM and timing signal S, A 30-Oct-97 16-Mar-01 1,233 212 6,148,364 Method for cascading CAMs S, A 30-Dec-97 14-Nov-00 1,050 31 23 6,240,485 Learn operation in depth-cascaded CAMs F, BA 11-May-98 29-May-01 1,114 304 6,219,748 Implementing Learn instruction BA, C 11-May-98 17-Apr-01 1,072 395 6,381,673 Next HPM in CAM F, BA 6-Jul-98 30-Apr-02 1,394 376 6,418,042 Tenary (3-state with "don't care") CAM A 9-Sep-98 9-Jul-02 1,399 75 47 6,237,061 Method for LPM F, BA 5-Jan-99 22-May-01 868 78 6,125,049 ML control circuit for CAM BA, C 5-Jan-99 26-Sep-00 630 89 6,137,707 Compare operation for CAM F, BA 26-Mar-99 24-Oct-00 578 4010 6,460,112 Determining LPM F, BA 22-Jun-99 1-Oct-02 1,197 5111 6,393,514 Full flag and almost full flag F, BA 12-Jul-99 21-May-02 1,044 3812 6,175,513 Detecting multiple matches in a CAM F, BA 12-Jul-99 16-Jan-01 554 3513 6,243,280 Selective match-line pre-charge in IRC BA, C 9-Sep-99 5-Jun-01 635 4014 6,275,426 Row redundancy BA, C 18-Oct-99 14-Aug-01 666 5315 6,154,384 TCAM cell A 12-Nov-99 28-Nov-00 382 1916 6,147,891 ML control circuit for CAM BA, C 21-Dec-99 14-Nov-00 329 15 1017 6,191,970 Select ML discharge in a part. CAM array BA, C 13-May-00 20-Feb-01 283 1118 6,324,087 Partitioning a CAM A 8-Jun-00 27-Nov-01 537 3319 6,249,467 Row redundancy BA, C 8-Jun-00 19-Jun-01 376 2020 6,229,742 Spare address decoder BA, C 8-Jun-00 8-May-01 334 521 6,252,789 Inter-row configurability (IRC) A 14-Jun-00 26-Jun-01 377 4922 6,246,601 Inter-row configurability A 14-Jun-00 12-Jun-01 363 1023 6,243,281 Segment access in IRC BA, C 14-Jun-00 5-Jun-01 356 2924 6,317,350 Hierarchical depth cascading S, A 16-Jun-00 13-Nov-01 515 53 8+25 6,445,628 Row redundancy BA, C 18-Jun-01 3-Sep-02 442 20

Ave. / S.D. 709 / 367Total 769

Date


Build a Valuable Patent Portfolio n  Application & market potential

n  Assess commercial values – in term of cost/performance/power/form-factor improvements

n  Differentiation – for competitive advantages n  Types of innovation in order of value hierarchy

n  System application level (S): e.g., the Sandisk “338” patent for flash-memory card

n  Including new functionality (F) & system architecture n  Chip architecture level (A) – building blocks n  Chip array architecture level (A) – for memory array n  Block architecture level (BA) – enhanced

functionality/performance n  Circuit level (C) – circuitry (more difficult to monitor)


NetLogic Microsystems’ M&A as IP Strategy n  1997: Founded (competitions from IDT, Lara, Sibercore, Music,

Kawasaki Semi…) n  2000: Intended to acquire BroadWeb (Taiwan)

n  Gained system-level software engineering supports n  2001: Strategic partnership with TSMC

n  Accessed TSMC cutting-edge design IP library n  2004: IPO at NASDAQ (mkt. cap. @~US$250M) n  2006: Acquired Network Div. from Cypress Semi

n  Took over Lara’s intellectual assets and business from Cypress n  2007: Acquired Aeluros Inc. (10G Layer 2)

n  Got cutting-edge analog and mixed-signal IP, know-how & business n  Filled the missing link on physical layer performance gap

n  2009: Acquired Network IC Div. from IDT n  Eliminated the last Network Search Engine competition

n  2009: Acquired RMI Corp. (multi-core processors) n  Got cutting-edge multi-core IP and how-how n  Filled the critical gaps in multi-core processing design/test

Customer Demand-side Driven Innovations Key Design Considerations

Noise (Low)

Performance (High Speed & Features)

(Low) Power

(High) Density (/area)

Yield/ Reliability

(High)

Form Factor/ Thermal Stress

(Small & Robust)

Reducing Overall

Cost to End Customers

Sys

tem

Inte

rface

Fac

tors Fab Technology Factors

Package Technology


"Design-in Methodology” for "Doing the Right Things Right at the First Time" mindset (to proactively solve problems at their sources of creation) to enable "First-Silicon” Success: Marketability, Scalability, Robustness, Manufacturability, Reusability, Quality/Reliability, Testability, etc. – All for “Integrated Design Capability”

Costs to Society is the Wildcard

Design-in Methodology for Product Dev. n  1st-level customer demands

n  Marketability – Proper performance & power spec. n  Robustness – Proper operation-margin stabilities n  Testability – Proper observability and verifiability n  Reusability – Proper system dev. cost amortization

n  2nd-level customer demands – yield, quality and reliability, thus overall cost minimization n  (Mass) manufacturability – Proper yield-ability n  Scalability – Proper application/roadmap adaptabilities n  Quality – Proper operational invariance n  Reliability – Proper invariance over long time



Basic Requirements for Competitiveness n  The foundation for Global Competitiveness are:

n  Value Proposition (demand-side/external critical success factors), Domain Capability/knowledge (supply-side/internal critical success factors) and Organization (the means to meet the demand with the supply)

Value Proposition: Values to customers,

shareholders & partners; customer services; product differentiation…

Organization: Core team, TQM, human resource managm’t., CRM, structure, system, procedures, etc.

Domain Capability: Core competency, intellectual capital,

supply-chain mgmt., technology,

innovations, etc.

The Foundation for Global Competitiveness


The Key to Success of “NETL” n  Value proposition (with 2nd highest Pipeline Impact index):

n  Enable IT service providers to provide high-value mission-and-time-critical differentiating services

n  Enable cost-effective IT network security end-to-end up to Layer-7 content filtering level at maximum (backbone wire) speed

n  Domain capabilities/knowledge (being the sole leader in its domain): n  Fully capable of providing cost-effective turn-key best-of-class system-

level “QoS” solutions from H/W level to service level n  Capable of addressing all relevant mission-and-timer-critical applications

within its domain of expertise n  Comprehensive IP portfolio to further enhance innovation leadership

n  Organization/execution: n  A corporate culture striding for continuous innovations n  Product development for 1st silicon success n  All-out efforts for securing design wins n  Product introduction for best possible time-to-market n  Product engineering for best possible time-to-mass production n  Corporate dedication to total customer satisfaction


Path to Success! n  Great companies take advantage of the 2

engines driving Information Age! n  NetLogic Microsystems are benefiting greatly from

both Moore’s Law and Metcalfe’s Law n  For all high-tech companies, the questions are:

n  Does the Moore’s law work for you or against you? n  Does the migration to a new technology node give you better

performance, lower cost, more functionality, lower power and more profit opportunities?

n  Does the Metcalfe's Law work for you or against you? n  Are your solutions (architecturally) scalable with the

increasing bandwidth requirements? n  Are your solutions independent of the carrier characteristics? n  Do your solutions provide differentiating (mission-&-time-

critical) values (like “QoS” and security)?


NetLogic Microsystems Innovation Methodology:

A Proven Path for World-class Innovation Leaders


Innovation Methodology - Valuable Ideas n  Customer value driven corporate culture:

n  Innovation is pursued solely to create DIFFERENTIATING VALUES to the customers

n  Contributing directly to their bottom-line in term of critical functionality, cost, performance, low-power, quality and delivery

n  Strategic partnership and close working relationship with the lead customer is a must

n  All valuable innovation ideas come from lead (strategic) customers n  Cisco for NetLogic Microsystems (recently ranked as the best supplier

by Cisco) n  Aligning all the company’s activities to be proactively responsive to

the customers’ current and future needs n  Including technology and product roadmaps as well as employee

evaluation/promotion n  Continuous innovations by solving the customers' next biggest

problems (the next product development cycle)


Innovation Methodology - Process n  Proper standardized process for innovation:

n  Goal: to create differentiating values to the customer n  Scope: to be consistent with the corporate capability and core

competence expansion roadmap n  Alignment: to company interests and strategic development n  Method and procedure:

n  Discovery, peer review, first draft of the invention, background check including competitive benchmarking, patent committee review, further refinement and due diligence checks, patent prosecution, etc.

n  Division of labor between the patent attorney and the inventor: n  The in-house or hired patent attorney is responsible for drafting the

patent application including claims (which are legal statements and must be handled by the patent attorney instead of engineer)

n  The inventor (inventing engineer) is responsible for full (written and oral) disclosure of the invention to the patent attorney


Innovation Methodology - Team n  Team building/teamwork:

n  Train engineers to acquire critical-thinking and truth-discovery skills, to collaborate with one another

n  Constructive interaction instead of internal friction n  Challenge conventional wisdom and assumptions (with “What If” and “Why

Not”) thinking “beyond the box” n  Open to new ideas but mindful of the weak links n  Pro-action (progress driven) - speedy learning through practices and actions

n  Build team with talents of complementary technical domain knowledge, including specialists and generalists

n  Understanding higher system-level optimization and trade-offs is essential n  It must be a COLLABORATION EFFORT (to be more valuable) instead

of individual one n  Useful solutions and creations are mostly from multi-disciplinary approaches n  Collaboration provides the necessary sanity check against "missing the big

picture" and ensuring the money and resources are well spent n  Innovation costs a lot of money and misled innovation can be an opportunity loss or

a major disaster to the company. n  Too many high-tech companies went into disaster because of premature

innovations (due to lack of supporting ecosystem/infrastructure): n  VMOS was a good example that sank AMI in the early 1980s.


Innovation Methodology - Sustainability n  Ecosystem for sustainable efforts:

n  Top management participation & full-commitments: n  Executive patent committee consisting of CTO, VP of

Business Development or CMO, and Chief IP Officer or in-house leading patent attorney

n  Incentives to inventors (positive reinforcement): n  Stock or monetary incentives n  Career advancement considerations n  Relieving the inventor the burden of drafting the patent

application n  Corporate culture conducive to continuous innovation:

n  Driven by value creations to the customer n  Reinforcing team building, teamwork and information sharing n  Cross learning among the project team members with

different functional/domain expertise (e.g., design, device/process, product, test, packaging, applications)

Thank You! ([email protected])


product development methodology – kbp as a game-changer

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