Twenty years ago, electronics companies made their own products. They owned fabrication facilities. They even used internally developed design software. All were considered strategic investments.

Indeed, times have changed. Most companies don't consider doing manufacturing themselves. Companies like Flextronics have built a healthy business outsourcing manufacturing, packaging and test. Chartered Semiconductor, TSMC and UMC have replaced an application-specific integrated circuit vendor's fab. And, the electronic design automation industry has become a $4 billion yearly supplier of design tools.

Change is moving up, down and across the design chain. After shucking manufacturing, packaging, test and fabrication, companies are turning to design realization companies and their core competency: getting chips designed.

Often misunderstood, "design realization" means getting the design implemented, and that's what design realization companies do. They can offer expertise in design implementation. But, don't confuse design realization with design services. Design realization can take a spec through testing and finished silicon and everything in between. Design services companies provide point solutions: verification or on-site teams. There are several design services companies, but few design realization companies.

And, while a systems or semiconductor company may have design realization expertise, it is reassessing whether it is core to its business, if that skill comprises its intellectual property, and even if it provides shareholder value. Often, the answer's no. The core competency, they find, is its market or domain knowledge.

Conversely, design realization lies in implementing a chip, which can be easily used to help a company save money. They have register-transfer-level designers who have refined their design expertise and tool knowledge, and continually research available tools. As a result, a design realization company has production-proven design flows and methodologies.

Of course, companies like Nvidia, Intel and the like will continue to do everything themselves, from front to back, making up a class of design that will be implemented in-house. However, the majority of companies can benefit from a business model heavy on an outsourcing strategy. The value is in understanding what can and can't be outsourced today and finding the resources to accomplish it.

As design and production costs continue to soar, companies are finding ways to save money and focus on their core competencies. Design realization is just the latest management efficiency to capitalize on a systems or semiconductor company's core competency.

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