If It Ain’t Broke, Start Fixing It Right Away

All the usual business advice went out the window when semiconductor value chain shifted.

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“If it ain’t broke don’t fix it.” It’s a line that can lull businesses into fatal complacency. It lies at the heart of Harvard Professor Clayton Christensen’s innovator’s dilemma writings: The products or services driving a successful business “ain’t broke,” but they usually prevent companies from anticipating or responding to disruptive innovation outside their walls.

Our electronics industry value chain, though, is broken. That’s the assessment of venture capitalist and EDA industry luminary Jim Hogan. With an important caveat, Hogan argues that the chain is broken today for the purposes of future directions and opportunities. The caveat: The core EDA business is still in excellent health and will probably thrive for decades to come. But the value is quickly shifting and it’s time to respond.

In the 1990s, he says, the RTL-to-silicon value chain shifted. “Pure-play foundries came on board. EDA emerged as tool suppliers and there were a host of fabless semiconductor guys that brought products to market,” Hogan told me in an interview earlier this year. “Value flowed from IDMs to fabless guys and the foundry.”

Then it all began to change. Today, the value is in apps—software.
“Apps determine behavior. Behavior determines hardware architecture and hardware reflects what software and applications want,” he argues.

System-level Value
The value chain is shifting from fabless and foundries into a sphere that’s application system hardware. “Look at how much value a company like Apple has created. That’s an example of value shifting to application providers,” Hogan notes.

At the same time, the technology and methodology that is the enabling foundation for that shifting value chain is evolving. Generally, a system on chip (SoC) is not something you synthesize at a high level, Hogan said; it is an aggregation of IP. “How does the architecture know what to do? That depends on the behavior that the software dictates through the drivers,” he added.

That means you not only have a more complex hardware design but you have a design that needs to be system- and software-aware. That means your design methodology needs to change.

“EDA classic” as Hogan calls it — RTL through physical implementation — will always be there; it’s vital. However, EDA increasingly meets the software app at the driver; the behavior of the drivers dictate the architecture.

So “software meets EDA in the emulator. That will grow significantly,” Hogan said.

IP as SoC building blocks will expand rapidly as well and require a huge number of embedded software and tools, Hogan added.

So, how do established companies straddle both those worlds and thrive in each simultaneously? That’s the challenge today.

But if you think it ain’t broke, go find your tool box right away.

(Fuller once edited John Cooley’s columns in EE Times; he remains in therapy).