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Each generation of FPGA products generally reaches its revenue peak about 4-5 years after launch, with nearly 60% of revenue coming from the first 6 years. Based on the time on sale, the lifecycle of an FPGA is approximately 10-15 years. According to Altera’s data, the peak sales revenue typically occurs in the 4-5 years following the launch of a new FPGA, due to the fact that FPGA has a very steep price decline curve. Xilinx generally sees a price drop of 50% two years after the launch of a new product, and by the ninth year, the price can drop by as much as 90% compared to the initial launch price. The peak shipment volume usually occurs in the 5-6 years, and this pattern of price and demand changes results in about 60% of FPGA revenue occurring in the first 6 years, while in the following 9 years, FPGA participants face a market with declining volume and prices. Therefore, FPGA manufacturers’ strategy is to participate as much as possible in the market share distribution during the first 6 years.
In fact, the leading process technology in the first 2-3 years is crucial for the competitive landscape of the FPGA market. Because even if a manufacturer can gain a high market share in the following 9 years, the revenue obtained is still very limited. In fact, large-volume customers will be locked in by leading players in the first two years, and subsequent new customers are generally those transitioning to more advanced generations. Therefore, if a new generation of process products cannot be launched within the first two years, it will essentially miss the stage of maximum market revenue for that generation of products.
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