Excerpted from Jeremy Bennett of Embecosm (open source services, tools and models to facilitate embedded software development with complex systems-on-chip). Jeremy is also an active contributor to the OpenCores project.

Dr. Jeremy Bennett:

“A modern silicon chip is typically built from silicon “intellectual property” (IP), written in a hardware description language such as Verilog or VHDL. Fabless design houses may never produce a chip themselves—one of the largest and best known is ARM in Cambridge, whose processor IP is built by other companies into one billion chips ever month. That IP costs the same amount to produce, whether it goes into one chip or one billion.

The marginal revenue from this silicon IP is tiny. It is an urban myth that the company supplying the cellophane film covering a mobile phone’s screen earns more than ARM from each phone, but the myth contains a grain of truth. ARM, as market leader, makes pennies from each phone. Smaller players make far less, or even receive just a one off payment. For them the marginal revenue really is nil.

The other factor is that the cost of any modern hardware is dominated not by the cost of the chip, but by the cost of the software that will run on that chip. In a modern product, there is far more value in the software than the hardware, and that software will need regular updating to keep the product viable.

This gives the recipe for open source hardware to work, at least for silicon IP. A marginal cost of nil and an associated product (the software services) whose value is pulled through by volume. Give away your silicon IP and software and make your money from servicing the software.

There is already a considerable amount of open source silicon IP, and hardware design companies such as ORSoC AB in Sweden and Beyond Semi in Romania who work with such IP. However a first glimmer of the complete approach can be seen with Google’s Android open source operating system for mobile phones. Google aren’t giving away the hardware (yet), but put Android together with the OpenMoko open source phone and you have the complete story.

There is a fly in the ointment—the legal position. Open source software relies on licenses such as the GNU General Public License (GPL) to enforce the “freedom” rules. These in turn are based on copyright law, which has for a long time been held to apply to software and its publication. Most open source hardware projects to date have used the GPL or similar contracts, even though it is explicitly not suitable for hardware use. Although silicon IP is written in a description language, its results are typically disseminated through manufacture, not publication. This is governed legally by patent law, and unlike copyright, patents cost time and money to obtain. There have been some efforts to write an open source license that would work for hardware, most notably the Tucson Amateur Packet Radio (TAPR) Open Hardware License, but this is still a long way from the maturity of the GPL.

I have recently started discussions with the National Microelectronics Institute (NMI), the trade body for the UK electronics industry, exploring the possibility of a definitive open hardware license that is robust in English law. We have a candidate first project, developed in the Cambridge University Computer Lab by Marcelo Pias. The initial goal is to establish the UK as a location where open source hardware businesses can proceed on a reliable legal footing, and then in a wider context internationally. If you would like to help, please get in touch. In particular we’d like an academic lawyer versed in this area of the law to get involved.

I believe open source hardware will have an important role in the computer industry in the future, just as open source software has an important role today. I hope my efforts will contribute to that success.”

Source: This article was first published in “The Ring”, the journal of the Cambridge University Computer Laboratory Ring in May 2009.