Some say that the "good old days" for the electronics industry will never return. I disagree-provided the "good old days" in question are those that predated the excesses of the late '90s boom. This downturn is not significantly different from previous ones, but because of the industry's state at the time of the inflection point, it came upon us more suddenly and dropped us significantly deeper than other recent recessions. As a result, it is forcing some fundamental shifts in the design methodology of the electronics industry.
First, given the duration of the recession, engineering resources are tighter than ever. When the economy picks up, companies will not immediately hire to prerecession levels, because of uncertainty and the relative economic weakness of the surviving electronics companies. When companies are finally ready to restaff, they will find that a lot of engineering talent left the industry for good during the recession.
Second, the recession has affected the number of design starts, but not the increase in design size or performance requirements, which have continued to grow unabated.
When we combine those two factors, the phrase "do more with less" rings true. This creates opportunities for companies that address the need for fundamental productivity improvements in the design process.
To achieve fundamental rather than incremental productivity improvements, companies are investigating methodologies to raise the level of abstraction at which the design is expressed, allowing design engineers to express more design content per time unit. Early results show that the adoption of this methodology, along with the enabling behavioral synthesis technology required for such a shift, can more than double design productivity. Recent versions of such technology achieve this with little or no penalty in the quality of results, such as silicon area and chip performance.
The recession's end will look different for different industry segments. For example, electronic design automation (EDA) has followed a somewhat different pattern from other technology sectors: The recession hasn't been as deep for EDA as for electronics as a whole, and the recovery has already started. Several EDA companies, including Forte, have received substantial amounts of venture investment in recent months, reflecting the relative health of this industry sector.
Inside EDA, two phases of recovery may be discerned. Early on in the recession, the electronics industry redesigned existing designs. That protected profit margins as prices fell, and created opportunities for EDA back-end tools.
Electronics companies now are initiating new designs. This in turn offers opportunities for front-end EDA companies that enable profound productivity improvements for design creation.