Outsourced IC design revenue up in 2009, says Gartner

LONDON – Although the absolute number of ICs designed each year continues to decline, an increasing proportion of IC designs are getting outsourced to service companies and they are charging more for their work, according to market research company Gartner Inc.

The total number of design starts declined by about 15 percent in 2009 compared with the previous year, Gartner (Stamford, Connecticut). At the same time the number of outsourced design starts declined by 9 percent in 2009, indicating that the number grew as a percentage of the total. Gartner said it captured its data by a survey of 35 vendors offering integrated circuit design services

However, despite the 9 percent decline in chip design starts, the design service revenue associated with those starts grew by 18 percent in 2009.

Drilling into those results the revenue from Asia/Pacific-based outsourcing customers grew more than 57 percent and communications ICs accounted for the bulk of the design starts and revenue.

The number of outsourced full-chip front-end design starts and back-end physical design starts declined more than 20 and 8 percent, respectively, in 2009. However, the share of back-end design starts outsourced in the geometry nodes between 90 nm and 45 nm grew significantly, whereas design starts outsourced in older process nodes between 350 nm and 90 nm declined drastically.

Chip design outsourcing suffered due to the economic recession but benefited relatively as chip vendors faced with staffing shortages continued to outsource chip designs to third-party chip design service providers.

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