There are interesting opportunities in the automotive space but chipmakers are now trying to work out the dollars and sense of it.
While the market opportunities in the automotive space may be exciting, the economics are staggering as consumers demand all kinds of new technologies: low power, safety-critical verification, Internet of Things — and they want it all at an incremental price of zero dollars over the actual value of the product.
This can make business decisions about even entering a market a delicate balancing act for the automotive semiconductor companies.
For the automotive semiconductor companies that are now being incentivized to provide the safety-critical ISO26262 certification in their chips that actually follow the spec, and do all of the things they’re asked to do, such as failure analysis, etc., it can double or triple the amount of time spent doing verification if they’re not careful, offered Mark Olen, product marketing group manager at Mentor Graphics.
On the other hand, looking at the last generation chip that one of these companies has designed, and provided to an automotive company, and it was not safety-critical rated, whereas the latest one that might be certified, they will not get double or triple the price. They may get a 10% increase in price, he said.
Economically, how do you produce a product that only generates 10% more revenue but could cost you two to three times as much in a major part of the design and verification process?
That’s what chipmakers are trying to figure out right now.
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