Electronic Business (EB): Design for Manufacturing (DFM) creates more overhead for design teams. Are companies ready to incur the additional expense?
Rhines: DFM will be largely self-funded because any increased cost of design will be offset by increases in yield. DFM is very high leverage; you can get results like 10-fold return on design cost because of a lower variable cost per unit. However, when you add cost to one area of a business to save money in another area, it can create problems organizationally. Semiconductor companies will need to work through those issues.
EB - What are some other factors that are causing design costs to increase?
Rhines: Market differentiation, for one. As the cost of building a fab increases, there are fewer fabs built for each node. That means fewer state-of-the-art foundries serving the same number of designers. Since many designs will thus be manufactured using identical processes, manufacturing can no longer serve as a market differentiator. As a result, one way that companies will be able to make their products unique will be to design them better than the competition.
EB - Anything else?
Rhines: The markets for electronic products are becoming worldwide, which makes them more cost-sensitive. You’ll need to have very efficient designs to compete in areas of the world that have different economies and cost structures. In addition, as the revenue for electronics firms continue to grow, the amount of money that they spend on R&D grows proportionately. At the same time, an increasing number of firms are becoming fabless, or at least “fab-light,” which tends to accelerate the push of R&D dollars into design rather than into manufacturing.
EB - What are some of the challenges that design firms face today?
Rhines: The biggest challenge will be securing enough designers and making them more productive. In the last 20 years, the number of transistors designed per engineer per year has increased a thousand times. That’s about a 40 percent growth rate per year in productivity that’s about equal to the rate of Moore’s law. Despite that, the industry has almost always been limited by the number of available designers. If we can’t continue to make designers 40 percent more efficient every year, then some designs will falter or won’t be started.
EB - Couldn’t the industry offset any lag in productivity growth by adding new designers, particularly from China and India?
Rhines: It will take time to get those designers up to speed, especially in some of the areas, like analog and RF, where there’s a lot of custom work. If the average number of transistors per chip goes up faster than the combined growth in the number of engineers and growth in productivity per engineer, then the number of unique custom designs will have to decrease.
EB - How will the industry cope?
Rhines: Because full-custom design will become more difficult and expensive, a larger percentage of designs will be done using field programmable logic. While there will be some high-volume products that justify full custom design, lower-volume products will continue to gravitate towards programmable logic to differentiate their products.
EB - Where will we continue to see full-custom design?
Rhines: Three areas. First, projects that have such a high volume that it’s more cost-effective to have a fully customized chip than a relatively more expensive (per unit) FPGA chip. Second, projects that require very low power, as in handheld devices; those designs are very tricky and a premium is on efficiency. Finally, projects that involve analog and RF circuitry, which must be custom-built for each chip.
EB - Does this mean that the industry will see fewer custom designs?
Rhines: Only if you characterize a “custom design” as something that doesn’t include programmable logic. When a chip that has programmable logic is programmed to do something new and unique, it is also, by definition, a custom design. The customization is just taking place at a higher level. What will happen is that a larger percentage of custom designs will use programmable logic rather than attempt to do the custom work directly in the silicon. The amount of design being done today is the greatest it has ever been, and it will continue to grow.
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