MANHASSET, N.Y. According to a report released Monday (April 27) by Accenture, a management consultancy, the current recession has triggered widespread morale and productivity problems in the semiconductor industry.
The report, "How Semiconductor Companies Can Achieve High Performance by Simplifying Their Businesses," warns that a growing number of employees at chip companies are becoming "distrustful" of upper management, "disenchanted" in their work, and "fearful of losing their jobs."
Scott Grant, an Accenture senior executive who led the research project, said fundamental changes underway in many chip companies as the recession hit, are specific to semiconductor companies.
Some chip companies, for example, are experiencing "unintended leaves" and "unexpected attritions" among engineers, said Grant. This includes engineers at a variety of levels, up to team-leader engineers, he added.
Grant, who worked for Intel Corp. before joining Accenture, and calls himself "a recovering engineer," said many engineers are feeling "a loss of control." With many chip companies engaging in "asset lite" semiconductor manufacturing trends, chip designers and process engineers are required to focus more on the reuse of intellectual property (IP) cores and industrialized designs.
This forces them to retool their products while paying increased attention to variables in supply chains and product life cycles.
Engineers who used to be graded on the number of chips they designed with the fewest errors, for example, are suddenly faced with the hard reality that their future isn't in design, nor even in the differentiated IP they create.
Their success is now measured by the longevity of the IP they create, which can run on a common platform. Another new metric is how often and how broadly IP can be reused in chip designs.
"A big killer is the 'resetting' of this foundation," Grant explained. Engineers are having a hard time grappling with this transition.
Changes such as divesting a business of unproductive assets or fostering more outsourcing is not enough, he said. Chip company managers need to help engineers make the transition without demoralizing them, said Grant.
Management's other challenge lies in reducing the negative repercussions that might affect a company's workforce.
Among other semiconductor industry-specific issues, the Accenture report explored, were: the importance of infusing a higher degree of operational excellence into the business; pursuing alliances to share the cost burden of new product development; and sharpening customer focus through more in-depth and accurate insights into customers' needs.