is a strategy for re-aligning data dependencies that were split apart
from disaggregation of the supply chain, without losing the economic
benefits of disaggregation. The key elements in virtual
reaggregation consist of: (I) identifying the major / emerging
inefficiencies in data exchange between supply chain segments; (II)
aligning those needs with others who share the problem; and (III)
defining, as a group, the standard convention(s) that will resolve those
needs (including flexibility for future growth). Effective standards should satisfy critical business problems that no single company can solve alone.
When economics dictates, reaggregation may extend far beyond virtual integration. In
recent years, some semiconductor companies at the leading process edge
have seen a resurgence of in-house software development to complement
commercial EDA offerings. In some cases, these companies have prioritized niche requirements, where economies of scale do not apply. In
other cases, process or design technology details associated with
leading-edge manufacturing processes or circuit techniques are so
proprietary that it becomes essential to develop in-house libraries and
software. In the last few years, two of the IP industry's
leading sources of commercial logic and memory IP folded into major EDA
industry players, substantially reducing the IP industry's standalone
footprint and clouding the distinction between the tools used for design
and design content itself.
Based upon this macro-level analysis, what can be extrapolated for the future? One
underlying theme is that economics is a very powerful force, so as
relative costs shift, the supply chain's business models will also adapt
to reflect the best value-cost ratio. This holds true regardless of whether any particular (spin-off) industry is in a period of expansion or contraction. A
spin-off industry must continue to offer a better perceived value-cost
ratio than all other feasible alternatives, or it will contract.
second theme is that, despite the compelling economic forces for
increased disaggregation stated above, the laws of physics upon which
our industry is built remain immutable. The semiconductor
industry's extraordinary data complexities and continually increasing
co-optimization dependencies cannot be ignored. The result
has been an increase in technical standards that are able to retain
data integrity and accuracy across a dispersed ecosystem of companies. Not surprisingly, this trend is growing as the system and silicon complexities increase.
considering how our semiconductor supply chain effectively manages
change in both technology and economics, we can better predict, and plan
for, a healthy fabless design ecosystem for decades to come.
find out more about some of these issues, you might want to come to the
17th Si2 Conference on October 9 in Santa Clara. Jim Hogan is the
keynote speaker, and the agenda and registration information can be
found at this link: http://www.si2.org/?page=1583
Steve Schulz, President and CEO, Si2
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