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Gregory Pomerantz: Business Models for Open Source Hardware Design

Feb 27, 2000, 01:11 (0 Talkback[s])
(Other stories by Gregory M. Pomerantz)

"The concept of open source hardware has the potential to solve many of the problems currently facing the semiconductor industry. Commodity electronic components and implementations of industry standard protocols may be more efficiently designed and distributed in an open source fashion. Furthermore, the widely heralded system-on-chip revolution will require the "commoditization" of semiconductor intellectual property, which may in many cases be more efficiently produced in a open source model. This paper will explore those ideas and propose possible business situations in which the open source hardware model could be successful."

"Increasing integration is putting pressure on commodity semiconductor component markets by forcing devices to become more complex, more expensive to design, and consequently more dependent on the development of intellectual property. The so-called "system on chip" revolution will fail unless commodity component manufacturers can easily integrate IP they did not themselves create. An efficient intellectual property sharing system will have the benefit of preventing needless duplication of design effort by many competing companies..."

"Open source is known to promote uniform, high quality standards, while competitive design can often fragment standards as companies vie for control (see Java-Script for an example of a software platform that was demolished by competition). An open source hardware development model would help establish a standard design automation tool chain and would strongly influence EDA tool vendors to work towards compatibility. Participants in IP markets often employ means of encryption and access control designed to limit a licensee's access to the intellectual property. These measures impose transaction costs and raise prices for consumers. Also, they further reduce transparency in a market that already suffers from a lack of transparency. An open source strategy eliminates many legal issues that give rise to transaction costs, eliminates the need for cumbersome access control measures, and achieves the highest level of transparency possible in an intellectual property market."

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Related Story:
Richard Stallman -- On "Free Hardware" (Jun 22, 1999)