By Ron Collett

From the business perspective of a semiconductor company, Numetrics’ solutions are about making substantial improvements in chip development productivity and schedule predictability. But just what is productivity, and how do you first characterize it and then improve it? What’s the outcome?

Productivity drives development throughput in your R&D organization – the higher the productivity, the greater the throughput. And throughput is a measure of how much product the engineering organization churns out during a given period of time.

There are three ways to boost R&D throughput:

• Add headcount
• Increase work-hours per week
• Raise utilization and productivity

The first two have downside: Raising R&D headcount increases cost, and more hours lead to workforce burnout and high turnover.

The only viable long-term strategies for sustaining high throughput are to increase engineering utilization and productivity.

Utilization

Increasing R&D utilization—the percentage of the engineering workforce’s effort spent on revenue-generating activities—is among the quickest and most effective ways to boost throughput. That’s because it essentially increases R&D resources without incurring additional cost.

Organizations struggling with low utilization find their engineers spend more than half their time on non-revenue-generating activities, such as sales, customer support, and product support – all of which should be handled by different groups. In large companies, that means millions of dollars a year are being squandered.

Engineering organizations in best-in-class companies, however, spend 73 percent of their engineering time on activities that generate revenue and create persistent value. By shrinking the amount of time engineers spend on projects that get cancelled, non-core research, myriad internal initiatives, and so forth, companies can significantly raise their utilization rates and, in the process, reduce R&D spending and/or develop new revenue-generating products.

Productivity

Productivity – the second factor driving throughput – is the amount of engineering output per unit of labor expended to create that output. Productivity is a function of efficiency. Only by improving efficiency will productivity rise. Analysis of R&D efficiency compares the effort a particular set of engineering tasks should consume to what they actually consume. Reducing the effort needed to complete a set of tasks raises efficiency, which increases productivity, and this gives rise to higher throughput.

Boosting productivity requires a reliable measurement system–one yielding accurate baselines and fair comparisons. Additionally, a robust measurement system paves the way for managers to determine the absolute minimum staffing projects need to finish on time. At that point, the projects are “optimally understaffed,” which means the projects can be staffed to levels that assume the teams will meet an improved productivity level.

And there’s where best-in-class companies are pushing the productivity envelope.

By Jeffrey Eversmann
After two years of doom and gloom, it’s refreshing to attend an industry event and hear talk of innovation—at all levels. That was the atmosphere at a recent GSA Silicon Series luncheon I attended in Austin, Texas, that featured a panel discussion on blurring technology lines.

At the application-segment level, Patrick Moorhead, marketing vice president with AMD, joked:

“I’ve been hearing that the desktop market is dying for the past 15 years.”

He made that quip after holding up the “4th screen” examples he had brought with him: an iPad and a Sony eBook reader. “Only 5-10% of consumers back up their data, so a fixed device will always be in the home,” Moorhead said.

I agree. While I like the professional security that a proliferation of leading-edge microprocessors brings, I am burdened by the yearly upgrade rotation I am now on to keep current the six-plus PCs in my home. All of us in the semiconductor industry have been through multiple iterations of the tablet device, some of them from Apple. As was often said by the panel, “it’s not an either-or these days.”

Fellow panelist Naveed Sherwani, CEO of Open-Silicon, Inc., added “the new form factor will succeed if it is useful.” So, panelists agreed that the iPad is not a desktop (or even laptop) killer. The question is: Will the average consumer add yet another device to the list of electronic gadgets we carry around each day?

The panel shifted to the technology level and wrestled with an intriguing question: Will ARM replace x86 in the desktop or will x86 replace ARM in the SoC market? While some in the audience checked email on their smartphones, Sandeep Shah, director of marketing and applications at Marvell Semiconductor, Inc., and Sherwani tackled the question.

Shah argued that an “ARM architecture licensee can bring together the best of both worlds.” (This is a very interesting perspective in light of Apple’s recent purchase of Intrinsity, which worked with Samsung to develop the ARM Cortex-based A4 processor.)

Shifting processor sands

Sherwani was quick to add that while there really hasn’t been an attempt by x86 to take over SoC design, that doesn’t mean an attempt isn’t brewing:

“In the next three years or so, things will get more competitive and more intense, when x86 is available for SoC development.”

Then it was time to move on to another much-discussed technology challenge, low power design. The panel members pulled out their different battery-powered devices and rattled off the actual vs. published battery life. “What we really need is more disclosure, a ‘truth-in-battery-life’ from silicon providers,” Moorhead said.

Shah, who probably lives power issues on a daily basis, talked about how the different Blackberry models used different chips from Marvell to get different power performance in the system. Marvell focuses on both system-level and gate-level approaches to power management. Sherwani wrapped things up from a design perspective saying “we have just scratched the surface on lower power design.” Maybe what we need is a Moore’s Law for low power design – something that will challenge engineers to do things that today are viewed as impossible.

All in all, the GSA luncheon was a great opportunity to re-connect with fellow semiconductor engineers. We exchanged cards with the same cell phone numbers, but with new company names, new titles, and new addresses. We talked about how tough things have been but how happy we are to be traveling less and spending more time with our families.

It felt like the calm before the innovation storm. I don’t know about you, but I’m here and getting ready for it.

By Jeff Eversmann

Sometimes the simple questions are the most vexing. That hit me this week while participating in a DesignCon panel in Santa Clara, moderated by EDN Executive Editor Ron Wilson.

The title seemed easy enough: “Getting to Design Quality Closure Without Compromising Productivity.”

But really, what IS quality? How do we define it?

My fellow panelist, Camille Kokozaki, president of Design Rivers, quipped “It’s like pornography: you know it when you see it.”

Piyush Sancheti, senior director of business development at Atrenta, came close:

“Quality is meeting the design objectives you have: whether it’s area, power, timing functionality, or, in a broader sense, customer expectations. Productivity is getting there.”

Sancheti then added:

“Being able to measure it (productivity) with tools like Numetrics is important because you want to hit your objectives as fast and effectively as possible.”

Not surprisingly, our panel wrestled with one of the big issues in design quality today: verification. It deeply affects design quality and productivity. Sancheti noted that for some teams, 70 percent of the entire design development is spent on verification.

What I see first hand from customers is they struggle to understand how verification affects their productivity. Some program managers I talk to say:

“I understand the scope of logic design and physical implementation. Verification is an unknown for me. If I give the verification team another two months, they’ll take it, but how do I know that we’re better off?”

So, I think we’re seeing that verification needs to come up with some sort of model of completion so people can move on. And that’s not easy. Our data shows that some companies toggle up the tape-outs as part of a larger verification strategy, but that can hurt overall productivity.

How we fix verification is a broader issue. Do we lean on formal methods at the architectural level as opposed to time- and engineering-consuming test vectors?

For now, our role is to help teams quantify their design effort, properly staff their projects, and understand where they stand with respect to the industry’s best teams. From there they can make fact-based decisions to drive productivity improvements.

That’s our contribution to the broader challenges of verification and design quality, but as we all know, it takes a village (and many future industry panels) to come up with the solution.

(Jeff is Numetrics’ director of professional services and product marketing).

Bright lights in a dimly lit DesignCon room: (L-R) Camille Kokozaki, Design Rivers; Piyush Sancheti, Atrenta; Jeff Eversmann, Numetrics; Michel Tabusse, Satin IP

By Ron Collett

The latest venture capital investment figures are out from PricewaterhouseCoopers’ MoneyTree and the National Venture Capital Association (NVCA). They’re not pretty.

VCs spent just $17.7 billion on 2,795 deals last year. That’s down 36 percent from $27.9 billion in 2008, and it represents the lowest dollar amount and number of investments since 1997.

The chart I pulled together above, based on that data, shows the quarterly VC investment trends for semiconductor companies in just the past three years. Not an encouraging trend line. Total VC investment last year in our industry was $771 million, compared with a peak of $3.4 billion in 2000. What a difference a decade makes.

This realignment of dollars has brought about new expectations from investors and from semiconductor vendors.

Speaking to The Wall Street Journal last week, Bob Ackerman, a venture capitalist at Allegis Capital in Palo Alto, said:

We’re preoccupied by capital efficiency.

Those two words, “capital efficiency,” speak directly to the semiconductor industry’s challenge. This focus on capital efficiency is why semiconductor vendors should be increasingly preoccupied with boosting engineering productivity to get the most from their R&D budget. Lacking an internal fab for differentiation in the fabless era, companies are looking for new ways to gain competitive advantage, and they’re training their sights on their R&D organizations.

The industry’s best-in-class semiconductor IDMs in fact have jumped on this imperative, especially as many of them have shed the last of their owned fabs and now need to compete with fabless companies.

But it works the other way too: Long-time fabless players suddenly find big new competitors that have shed their fabs. They too are looking to boost product-development productivity to stay one step ahead of their new competition.

It’s clear the days of big-time investment are a thing of the past. Today, good companies are those with innovative product ideas; great companies are those that also drive highly productive R&D organizations to get those products completed on predictable schedules and to market ahead of the competition to realize higher returns.

By Ron Collett

(Summary: As the recession’s pain recedes, semiconductor companies have an excellent opportunity to take advantage of the economic crisis to drive productivity improvements throughout their R&D organization.)

The line “never let a serious crisis go to waste” was made famous a year ago by White House chief of Staff Rahm Emanuel, who was speaking to business leaders. For the semiconductor industry emerging from a sharp recession, now is the time to capitalize on the motivation implicit in Emanuel’s quotation.

Consider, first off, the proven benefits that companies get when they take advantage of a recession. A Bain & Company study found that:

• Twice as many companies move from laggards to leaders during a downturn than they do during good times.
• The majority of those companies that take steps to make that move sustained their gains long after business came back.

For those that don’t, the numbers are discouraging:

• One-third of banks and two-fifths of big American industrial companies fell from the first quartile of their industries in the recession of 2001-02, according to a McKinsey study referenced in The Economist.

There’s plenty of advice for companies willing to take advantage of a business slump. Dave Jones and Pierre Loewe, writing on ChiefExecutive.net, advise managers to re-assess “unarticulated” customer needs and redraw their industry ecosystems.

I’d amplify another of their key points: buttress your core competency. Today’s semiconductor industry is a different place than it was before the recession. The search for differentiation in core competencies needs to be focused at product development. This is crucial for fabless companies that don’t have their own manufacturing to create differentiation. But it’s also important for formerly “fabbed” companies making the transition to fabless.

Out with the old?

Some semiconductor companies emerging from this recession will be tempted to apply old templates to new designs. With understandable caution about hiring more engineers in the short-term, the tendency will be to do more with less—to demand more products faster with fewer engineers.

What will happen?

Unrealistic schedules and budget overshoot, for one thing. For another, the urge to crank out more products to take advantage of resuscitated demand will lead to portfolio-management problems.

It doesn’t have to be this way. Productivity improvements and best practices are commonplace in manufacturing; there’s no reason they can’t be employed in R&D. It would be a shame to waste a golden opportunity to exploit this moment in history, and, to finish Emanuel’s quotation, to take the “opportunity to do things you think you could not do before.”