mSemicon develops an item (which can be and typically is, a subassembly — a part of a larger client system) where the intention is that mSemicon will be supplying that item when it enters full production. We are not a design house per se, even though the design function is a central aspect of what we do: we are a supplier.
This is how most industrial companies operate around the world; they depend on their suppliers to solve some of their problems, to be innovative and to accept responsibility for important components or subsystems of their own products.
Intellectual Property (IP)
When a client comes to mSemicon with an idea, it is usually based on some item of intellectual property or on an existing proprietary product of that client. This IP belongs to the client and nothing that happens with mSemicon changes that.
By the same token, as mSemicon goes about developing its solution for the client’s application, it builds on its own existing internal IP to generate new, proprietary, application-specific IP. This new IP normally applies only to the component (e.g. an electronic circuit board) or to the particular implementation involved and not to the client’s overall product or concept. This is normal industry operating practice and it is done this way order to protect the investment of the supplier in innovation, resource allocation and the other costs that go into developing a successful new product. The client, however, is generally the only party to whom that particular customised product can be sold.
mSemicon charges a fixed amount per project termed Non Recurrent Engineering (NRE) Costs and does not charge per hour, per week or in any time-related manner. The fixed sum is to be considered a contribution towards the customisation of mSemicon technology and for the exclusivity involved. This sum is normally paid in agreed tranches, starting with the order.