Semiconductor IP News and Trends Blog

Outsourcing Engineering Increases Integration Needs

A discussion in outsourcing trends shows cause and effect result in similar outcomes between the aircraft electronics verses the semiconductor markets.

The question was a simple one: “What trends do you see occurring in today’s world of customer, contractor and supplier activities?” The answer’s varied with the experiences of the audience, all of which were from the electronic hardware and software industries.

One individual from a commercial aircraft manufacturer was concerned about the trend toward outsourcing of engineering. It seemed to her that the company was in danger of giving away their important technology and manufacturing intellectual property. One the plus side, such outsourcing was increasing the need for system engineers to oversee and integrate all of the various subsystems back into a final product.

Another concern was the trend where the company’s outsourced suppliers would outsource their work to still other suppliers, analogous to sub-contractors. Her concern was that the quality of the overall subsystem or service would be jeopardized. “It is hard enough to manage suppliers, but what do you do if your supplier’s suppliers are not performing well,” she wondered?

These same questions and concerns have been poised to the semiconductor IP industry, although for different reasons. While cost savings may be the predominant driver for outsourcing in the aircraft electronics industry, complexity and time constraints seem to be the critical factors in the IP world. In order to deal with the rising complexity of System-on-Chip (SoC) designs combined with a shrinking Time-to-Market (TTM) product window, IP providers have had to incorporate various supplier-provided IP into a subsystem module.

Even though the reasons for multi-layer suppliers are different between aircraft electronics and semiconductor IP development, the result challenges remain the same. How will all of the IP be successfully integrated into a larger subsystem module? How will the quality of this subsystem be assured and verified?

A recent survey by GarySmithEDA confirms the importance of these issues to the semiconductor industry (see Figure). The top challenges for managing IP are verifying the IP, integrating and assembling the IP in the design, efficiently making internal IP available for reuse, and managing IP bug fixes and updates.

Managing semiconductor IP trends - from GarySmithEDA.

It is good that the proper challenges have been identified. The next step is to find ways to resolve these issues. This time, outsourcing will not be the answer.