(Summary: For semiconductor companies, differentiation has shifted from manufacturing to improving productivity in new-product development. That realization is the easy part; getting there requires help.)

By Ron Collett

I’m always impressed with the level of optimism I find at semiconductor industry events around the world. There may be pockets of gloom about the state of the semiconductor industry, but executives certainly don’t share it. Yes, it’s not the same industry it was 10 years ago, but, no, it’s not doomed. Far from it: The dynamics are just different.

That was my message when I presented last week at Malcolm Penn’s International Electronics Forum in Geneva. Here’s why the dynamics are different:

• The industry head count has shrunk 30 percent this decade
• Industry consolidation has picked up pace
• Cost-cutting is rampant
• There’s more pressure than ever on design teams to get great products out the door on time and on budget

Here’s how the dynamics are different: Differentiation has shifted as industry disaggregation has reached an end state. There was a time when a semiconductor company differentiated itself through manufacturing and process technology (or way back when, through making its own steppers!) No longer.

So where’s the differentiation? It’s not in cost-cutting. Everyone’s doing that.

Differentiation has shifted to the heart of the semiconductor company’s value proposition: its new-product development.

Electronics Weekly’s David Manners, in his coverage of IEF last week (“What’s the Answers to the Chip Industry’s Problems? Ask IEF”), touched on how profound this can be. He quoted Alain Dutheil, CEO of ST-Ericsson, as saying 85 percent of his 8,000 employees are in R&D.

The other part of the story, which we’ve blogged about, is that most SOC projects slip schedule and most IC teams tend to underestimate their product R&D costs.

That brings me back to our IEF presentation (“Raising the Bar on Semiconductor R&D Management, Execution, and ROI”), which we created in partnership with PRTM, one of the world’s premier operational strategy consulting firms (with deep ties to the IC industry).

Our three take-aways were:

• The bar is being significantly raised on semiconductor R&D management, execution, and achieving ROI
• Companies must continuously progress through the stages of maturity to thrive (functional, project, portfolio, and cross-enterprise excellence)
• Fact-based planning is a critical foundation for ongoing NPD success

Anyone can cut costs in challenging times but winning companies find news ways to differentiate themselves, and they are the companies that come out of recessions stronger than their competition.

Summary: Re-planning a semiconductor design project is often inevitable as the program is underway. The key to effective, productive re-planning lies in understanding complexity, schedule and resources.

Change is inevitable. Economic factors, mergers and acquisitions, customer specification changes, management and strategy changes all affect project planning and execution. These factors create a need for re-planning IC projects while they are ongoing.

The key to re-planning is the same as for the original planning process: an understanding of complexity, schedule and resources. Numetrics’ NMX-ERP can capture not only the starting characteristics of your design, but also updates as work is completed. This means that at any point during the design, you can calculate the work remaining and the resource and/or schedule implications of that.

Re-planning is simply a process of updating the assumptions based on new information. From there it is a simple process to re-run the analysis, and to generate a new plan. This is easy not only because there is explicit support in the tools for re-planning and the management of multiple scenarios for a single design, but also because there is no need for data re-entry. Everything is built from the original plan, saving a great deal of time for your planners.

Schedule Risk Analyzer generates a comprehensive set of reports that quantitatively assess the underlying schedule risk, given the design’s complexity, staffing assigned to the project and target cycle-time.

The real implication of the re-planning capability is that when a change is proposed, you can quickly determine feasibility. For example, if marketing comes to you and says, “We need samples six weeks early for a key customer,” you can rapidly tell them what that means for resources. If additional resources are not available, you might consider scaling back product features to meet the new schedule. Alternatively, you may be forced to complete the design with fewer engineers than you had originally planned for. In such a case, you can quickly determine the best way to meet your business objectives with the new constraint—either reducing the feature set, or planning for a managed schedule slip.

The net benefit of Numetrics’ re-planning tools is fact-based decision-making in a time of stress. Fact-based planning improves the quality of internal decisions, leading to a healthier business and happier employees. And that can’t be bad.

Summary: Comparing the specifics of your semiconductor design with industry and company history enables insightful what-if scenario analysis to help manage development programs effectively .

During the planning stages for a chip design, there are a number of variables that can be tweaked in the creation of the final product plan. We can reduce or expand the feature set for a new device. We can reduce or extend the schedule. And we can reduce or increase the number of full-time-equivalent (FTE) staff allocated to the project. By manipulating these variables, we can negotiate a plan between the different stakeholders. In some cases, resources are the limiting factor. In others, the schedule is non-negotiable (for example a lot of consumer products must be ready for CES).

Running a lot of plans against all these variables has historically been difficult and time-consuming. In addition, the results have always been subject to arguments because there has been no trusted model to relate complexity, resources and schedule. Numetrics changes all that. By tweaking resource, schedule or feature set (complexity) assumptions, NMX-ERP can rapidly generate graphs that show the feasibility of each plan, and compare it with company and industry norms using their proprietary complexity engine and plan synthesizer.

The speed and defensibility of these analyses lends them great power. It is not rational to assume productivity or schedules that are significantly different from past performance, so any feasible plan must lie close to the lessons of history. There is a cost to adding features, or to shrinking the schedule, or to reducing headcount. The most effective way to negotiate these choices is with the aid of an objective toolset that combines the specifics of your design and plan with industry and company history. The tool is fast enough that you can run tens or even hundreds of plans in minutes or hours. From these scenarios you can then pick the plan that best meets your business goals.

Summary: Realistic semiconductor IC project planning hinges on industry-norm effort, which is the comparison of the actual productivity achieved by teams across the industry and the actual complexity of their designs.

Complexity is a measurement of how difficult it is to complete a design. It’s a measurement based on many attributes of the design, carefully correlated across multiple historical designs. But in order to plan, we need to know the amount of effort it will take to complete a design of a certain complexity. The answer lies in a comparison of the actual productivity achieved by teams across the industry and the actual complexity of their designs.

From this comparison we can calculate the amount of complexity an average designer can implement in a unit of time. Because this is a normative value calculated across the industry, we call it industry norm effort.

We can also make the same calculation for your company—assessing the amount of complexity your designers have historically been able to implement in a unit time. By comparing this with the industry norm, you will get a sense of how your team is doing as compared with the industry.

But the main use of industry norm effort is in conjunction with the complexity data for a proposed design:

• We can accurately and rapidly calculate the total effort required for that design using either your company data, or the industry norm data.

This provides a firm foundation for realistic planning, while still allowing you to set aggressive (but not unrealistic) targets for your team.

Summary: Design complexity can be quantified and communicated in a way that makes IC projects predictable and more productive.

It doesn’t take a rocket scientist to know that the resources and time required to build a chip vary from one design to another. The variation is a function of how difficult the chip will be to build. We measure that and call it complexity.

The hard part, however, is to know which attributes of the design correlate to the effort required to build the chip.

• Is clock speed important?
• What about the number of transistors?
• Re-use?
• Analog and mixed signal?
• Voltage islands?
• Modes?

The list goes on and on. One of the reasons why the NMX-ERP™ software suite accurately forecasts the time and resource requirements for a design is that our engineers, using more than a thousand design projects, have developed a deep understanding of just how hard a given project may be so your engineers can be more productive.

Knowing how to translate chip-design attributes into complexity is the foundation of apples-to-apples comparisons between designs. That’s critical to making sure your latest design can be compared with other industry designs, as well as designs your company has done in the past. After taking in all the complexity factors as chip specifications, Numetrics’ engines can reliably and rapidly calculate the relative complexity of your design, as compared with every other design in our industry database. That’s the foundation upon which all the plan synthesis, what-if scenario analysis, re-planning and root-cause analysis capabilities of NMX-ERP are built.