Long Tail in Semiconductors: Starting with Electronic System Design

Article By : Bob Smith

The long tail of the $500-billion semiconductor industry and the huge $2-trillion global electronic products market starts at electronic system design, a market segment modestly sized at around $10 billion...

The long tail of the $500-billion semiconductor industry and the huge $2-trillion global electronic products market starts at electronic system design, a market segment modestly sized at around $10 billion.

While comparatively small, this relatively unknown segment of technologies, methodologies, tools and services that enable chip design, is a giant to many across the electronics industry. Without it, developing a new chip, the many breakthroughs and emerging applications and products we expect from the industry wouldn’t be possible. That’s why the design ecosystem market segment is at the center of the bull’s eye and not the end of a long tail.

Underestimating the importance of the design ecosystem would be a mistake. Its significance emanates from the center of the global electronic products chain and affects everything along the way that supports the global $2-trillion market for electronic products. All IC manufacturing begins with design, impossible without the electronic system design community’s support.

Click the image to enlarge. The electronic system design ecosystem enables chip design and sits at the center of the global electronics product chain. (Source: The ESD Alliance, a SEMI Technology Community)

It’s also a great industry during recessions and pandemics, notes Wally Rhines, CEO emeritus of Mentor, a Siemens Business, in a recent talk titled “Continued Evolution of the Electronics Ecosystem.”

Historically, the electronic system design segment has modest revenue loss even in the worst of times due to sustained R&D efforts of its user community. In fact, annual reductions in semiconductor R&D spending are rare and usually small, he affirms.

Rhines cites strong growth reported by public companies in the first half of 2020, an indication the market segment hasn’t been seriously affected by the coronavirus and other global crises. Another is increased investment by systems companies.

As well, the electronic system design market segment keeps moving forward. After all, innovation is one of its key characteristics. A good example is its use of machine learning to create and enhance tools to ensure better quality of results and faster time to market for new leading-edge chip designs.

New applications for chip design tools often propel the innovation. Rhines counts 505 companies developing electric cars and light trucks and 277 working on autonomous drive programs, all in need of design tools. The same goes from 5G product designs or redesigns, AI chips and so much more. Each of these complex application areas have specific and exact requirements different from the others.

Announcements of new, improved and innovative design tools should be forthcoming as more wafer capacity comes online with 10 new 300mm fabs scheduled to open this year. Demands of new semiconductor nodes can only be met with electronic system design tools, reminds Rhines.

In June, U.S. lawmakers introduced a bill to provide $22.8 billion for semiconductor manufacturing. CHIPS (Creating Helpful Incentives to Produce Semiconductors) for America Act is now heading to the House-Senate conference. Once it makes it through, Rhines believes that it will be a boon for the electronic system design segment, as well as the entire electronic products chain. The bill is designed to increase federal incentives to stimulate advanced chip manufacturing, enable cutting-edge R&D, secure the supply chain, bring greater transparency to the microelectronics ecosystem, create American jobs and ensure long-term national security.

Design is important and the foundation of the electronic products chain. Sitting at the center of the bull’s eye, the electronic system design market segment begins the products chain and ensures success from beginning to end.

— Robert (Bob) Smith is executive director of the ESD Alliance

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