I am on my way to Japan and I have just finished to
read an excellent book and in my opinion a "must have" for any marketer and
executive in the EDA and the semiconductor industries. The book is called
"Chips and Change - How Crisis Reshapes the Semiconductor Industry" by Clair
Brown and Greg Linden.
If you are new to this industry, it will help you to
understand the history of the semiconductor companies, the challenges they
faced and the revolutionary changes, they had to go through in the last generation.
Obviously the EDA industry was heavily influenced by these changes as well. If
you are industry veteran like me, it will help you to arrange your thoughts and
get observation about the changes you have seen (but may not think about) in
the last few decades.
The book describes 8 crises happened in the last 30 years
and their impact on the leading semiconductor companies and the US economy. The
book reminds us that our important industry (the EDA industry) serves $250B
while we harvest only 1%-2% of this revenue.
The book goes through a thorough analysis of the
globalization that started in manufacturing and continued with the design
portion however at the end paints a conclusion that this trend does not really
change the competitive map since many of the semiconductor companies have
globalized themselves as well and therefore maintained their competitive
The chapter that was most interesting to me was chapter 3
which covers the crisis around the rising cost of design. The chip becomes the
system with SoC cost rising from $7.6B in 1997 to $46B in 2005 (20% of the
total chip revenue) to the point, you need to get a return of $400M sales in
order to justify $20M SoC investment.
The key design cost components as described by the book are:
- Hardware/Software co-design with increased cost of 1081% over the last four
- Software cost with SoC (HW/SW) integration as the most critical issue with
increased cost of 375% in the same period.
- Validation with 90% increased cost at the same period.
As written in the book, the industry is trying to
solve this problem in multiple ways. Two of them are emerging methodologies:
- Reusable IP - the need to create or acquire IP that can be integrated
and re-used quickly by the customers as they migrate from one design to another
was described as the key issue being faced by designers today. I was excited to
hear about this topic since Cadence addresses this issue already today by
focusing on a TLM-driven design and verification methodology with emphasis on
IP reuse. Cadence is also working on other solutions that will help customers
to integrate IPs into their SoC quickly. Stay tuned!
design approach - by moving to ESL, the industry can potentially reduce the
cost of development. Although the book mentioned that this is a long journey
that has started at the end of the 90's, it recognized the fact that this
approach has a lot of merit. There were two reasons the book mentioned, the
adoption for this method is not fast enough. A) This approach was used in the past mostly for modeling and HW/SW validation
without wide adoption in the connection to implementation - again, this is 100%
in line with Cadence approach. B) Designers
are always pressured by the next deadline and therefore do not have the time to
learn new technologies. We (the EDA vendors) need to continue to invest in
education of the market and showing the productivity improvement the leading
customers are getting.
I would like to hear your opinion as well and if you liked
what you read above, I recommend you to buy the book and read more details in
this chapter and the other 7 interesting chapters.