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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By Ron Collett

The increase in semiconductor design complexity never slows. This reality always reinforces itself when I look at the agenda of a given week’s technology event. This week’s headliner is ARM Techcon3 in Santa Clara.

Here’s a sampling of the presentations:

• “How Software and Hardware Can Cooperate To Manage Power Consumption in ARM-based Systems”
• “Fireside Chat: Enabling Internet Eveywhere and Advancing Next-Generation Designs”
• “Energy Efficient Design at 65nm – What Really Works!”

And the list goes on—challenging design issues at complex technology nodes everywhere you look. It’s little wonder then that most semiconductor design projects slip schedule (see chart).

Old habits in a mature industry die hard. Engineers have built products in more or less the same way for 40 years, and they’ve had tremendous market success. So why change? Engineering intuition always seems to work, and a bottom-up approach to project staffing is the way we’ve always done things. No reason to change, right?

Wrong.

Projects slip for a number of reasons:

• We’re human. Who can predict when or if a spec change might occur or the flu takes out a few key engineers for a week?
• We often lack the context to make fact-based decisions for dizzingly complex designs. For example, if you’ve spread a design over three locations in different time zones, using a newly-acquired team designing to a new process, you’re trying to extrapolate the effect of those factors based on your experience. But you probably have never experienced those factors before because each design is different.
• Projects are late often because they are under-scoped. The schedule for the new project is based largely on the post-mortem of the last project, with the conclusion that none of the things that went wrong last time will be allowed to go wrong this time (and no other major new challenges will be allowed to creep in!).

Typical bottom-up reactions to managing such complexity tend to fall into two categories:

• Boost staff to hit schedule. This generally creates either a low-productivity, low-throughput situation or a high-throughput, low-productivity environment. Teams might hit schedule but will blow out the budget.
• Leverage a small, skilled team of engineers and drive it hard. This can marshal costs and improve decision-making, but a small team can produce only so much in a given period of time, even if it’s highly productive. Too much pressure to hit an unrealistic schedule also kills morale.

Sharp engineering managers can achieve best in class and cut or eliminate schedule slip by adopting a top-down approach that complements their traditional bottom-up planning. The top-down methodology uses:

• Quantified estimates of the chip’s complexity
• The team’s productivity
• A model of the rate at which effort will be expended on the project.

With the proper infrastructure in place, schedule estimates can be generated within just a few hours. At this point you can benchmark against your own experience or against the industry’s experience and make fact-based what-if tradeoffs to boost your schedule predictability and design ROI.

More than 80 percent of semiconductor projects slip schedule. But we can change this reality. You wouldn’t expect this from your foundry, would you? Your foundry partner gives you a precise estimate of yield on your chip based on its models and its vast experiences with similar projects. You should expect the same predictability from your product-development organization.

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I had the pleasure of participating in a great online panel yesterday that was part of the EE Times SOC Virtual Conference, attended live by more than 1,500 people. CTO Grant Martin with Tensilica, product-development Vice President Steve Douglass with Xilinx and ASIC and FPGA designer Sven Andersson of Realtime Embedded AB all contributed to robust discussion of where next-generation design is headed.

I encourage you to listen to panel, which is now archived for the next six months.

My point was pretty straight forward:

• If you misunderstand your semiconductor design project’s true cost, your SOC may be doomed.

Think about it: An SOC design today needs to return 10x its investment. There aren’t a lot of huge end markets that justify SOC projects where the costs and schedule aren’t carefully managed. If the design costs $50 million to $80 million to develop, and there’s only a $200 million market, then the design can’t be justified.

So getting your arms around true development cost is what SOC development is all about.

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