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Panel tackles outsourcing tradeoffs

Posted: 08 Feb 2010 ?? ?Print Version ?Bookmark and Share

Keywords:IC outsourcing? design service? intellectual property? EDA?

A panel discussion at the DesignCon 2010 conference centered on the evolution of the IC outsourcing model!and its implications.

The conclusion: IC outsourcing!which involves the migration of chip design, packaging, wafer production and even operations to third parties!enables companies to cut costs and focus on what they do best.

But it also means that the value chain!and jobs!may move offshore. Asked about the implications of job losses!and the ongoing hollowing out of the U.S. semiconductor industry!one panelist gave a startling but brutally honest answer.

"Life is cruel," said Bob Quinn, founder, chairman and chief technology officer of 3Leaf Systems Inc., a chipmaker, during the panel. "We have to adjust to it.

The trend towards outsourcing more and more functions to third parties in Asia and elsewhere is simply "something you have to deal with," he said during the panel, entitled "The Last Mile: Outsourcing Production."

"Today, you are at the mercy of your capabilities," he said. "The world is changing. The world is cruel."

(Sad) Trends
There has been an ongoing trend towards outsourcing in the semiconductor industry since the 1970s. The industry began to outsource much of its chip-packaging and test capabilities starting in the 1970s, followed by wafer production to the foundries starting in the 1980s, followed by intellectual-property (IP) and front-end design services starting in the 1990s.

Today, for example, 25 to 30 percent of chip IP is outsourced to third-parties, said John Koeter, VP of marketing for solutions group at EDA vendor Synopsys Inc., during the panel. Some 17 out of the top 20 chipmakers outsource their IP in one form or another, he said.

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