With the announcement that the company became profitable in Q1 2017, that year-to-year growth will exceed 700%, and that 2017 revenues will pass the $100 million mark, Achronix has successfully made the challenging transition from speculative FPGA startup to viable, self-sustaining company. This alone is a remarkable achievement, in the wake of numerous well-managed enterprises that tried and failed to reach that same elusive milestone. The road to “profitable FPGA company” is littered with the smoldering remains of decades worth of dead startups.
And, it’s not like Achronix just started out with the perfect plan, or even the building of a better mousetrap. The company was actually founded on the idea of creating asynchronous FPGAs that could achieve many times the performance of the then-current state-of-the-art for programmable logic devices. The world would rush to buy a faster FPGA, right? Turns out… no, so Achronix pivoted. They launched their much more conventional Speedster FPGA family, with hard IP specifically tailored to target markets, fabricated on cutting-edge Intel 22nm FinFET technology. That decision won them some key customers, some sustaining revenue, and some respect in the market.
Achronix followed that success with several add-ons that increased value to their target customer base. They had established value with Speedster in acceleration, so the company launched premade accelerator boards based on Speedster FPGAs aimed at HPC and networking acceleration. For many customers, this saved the hassle and expense of designing their own board based on the FPGA, and it helped them get their product to market faster.
Still, trying to maintain a differentiated FPGA against the hyper-entrenched Xilinx/Altera duopoly is a long-term losing proposition. Achronix needed a sustainable differentiator – a defensible moat inside which they could carve out a unique business and presence. That magic differentiator, it turns out, was entering the embedded FPGA IP business. You know – the one we talked about last week when we wrote about FlexLogix.
The significance of embedded FPGA for the FPGA market cannot be overstated. Without the availability of embedded FPGA IP, the FPGA companies have a choke hold on the idea of programmable hardware. If your design falls in the realm that currently “requires” hardware programmability – neural network inference, embedded vision, data center acceleration, software-defined radio, software defined networks, and so forth, you have no alternative but to buy your programmable logic in FPGA form from an FPGA company. Even if you’re designing your own custom ASIC or ASSP to attack a critical problem, you have to park an FPGA next to it and pay the margins demanded by the FPGA companies.