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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:
As written in the book, the industry is trying to
solve this problem in multiple ways. Two of them are emerging methodologies:
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.
I have been an advocate of IP reuse for much of my 30 years in this industry. And despite the advances in technology and the obvious need for IP reuse the primary stumbling point is still hubris of engineers that believe that only they can design the best widget.
please share the book
The most effective way kill the economy are:
1) "free trade,"
3) illegal immigration,
4) special work visa programs, and
5) unrestrained government spending
The flood of products creates trade deficit. The one-way trade is unsustainable.
The indicators of economic collapse are now more visible in the housing and auto then in semiconductor industries. The semicondutor will be nationalized (bail out) to preserve capability for military just like auto. Intel, National are too big to fail just like Christler, GM and Ford.