By Ron Collett

(Summary: As the semiconductor industry emerges from the recession, new ways of thinking are emerging as well to improve what’s becoming a new differentiator for companies: IC design development.)

All indications are the semiconductor industry is rebounding from the painful recession of the past couple of years. The latest upbeat data points include:

• Worldwide third-quarter PC microprocessor unit shipments rose 23% compared to the second quarter, reaching a new all-time high, according to market research firm International Data Corp. (IDC).
• Chip-sales growth should be 10 percent in 2010 and 8.4 percent in 2011, according to the Semiconductor Industry Association. The decline in 2009 chip sales (down 11.6 percent is now less that earlier forecast).
• Individually, companies like Marvell, TSMC and ON Semiconductor are reporting encouraging results.

But, as they say, there’s good news and bad news. The good news is obvious. The bad news is more subtle: Companies are beginning to crank up the product-development dial significantly, and this can become a challenge for R&D organizations.

As a surge of new projects occurs, hiring generally is slow to catch up to demand. This puts stress on engineering organizations. Schedules are difficult to predict, and the engineers can get shifted from one product development team to another in the race to make deadlines. Managing a portfolio of products turns into a torch-juggling exercise—spectacular to watch but done with the knowledge that the risk is high.

This is a significant problem in the fables era—a time in which IC design development is an increasingly important source of differentiation for semiconductor companies. A sudden burst of product-development activity can bring R&D organizations to their knees.

Design development productivity is something to consider as we emerge from this recession. The stakes are high, and there’s little room for error in marshalling engineering resources to get products to market quickly.

All recessions force change on business, and this one is no exception. Old ways of doing things are being replaced by new thinking on productivity—all with an eye toward making “up and to the right” last.

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