| Industry Insight|
20/20 Vision for 2010
In his keynote speech to the San Jose Synopsys Users Group, Dr Aart de Geus, Synopsys chairman and CEO, considered how the semiconductor industry is helping many economies emerge from the recession. Synopsys Insight reports the highlights from his speech.
Twenty years ago the biggest factors influencing the growth of the semiconductor industry were technological; today the economic dynamics are of equal importance.
And whereas System on a Chip (SoC) was inconceivable just two decades ago, it is now at the center of the semiconductor “techonomic engine”, a way of thinking that brings together technology and economics (Figure 1).
Figure 1. The Semiconductor Techonomic Engine
Technomics refers to the remarkable increases in both scale and systemic complexity across both technology and economics. Further, that systemic complexity is rapidly moving across the IC design ecosystem: from analog to digital interactions, from the massive amounts of software development now undertaken to the physical realities of advanced devices, and the need to understand and optimize for increasingly tough manufacturing challenges. From systems to silicon, no part of this incredibly complex process is immune from either the technology or the economic pressures.
Like the rest of the world, the US is currently recovering from one of the longest recessions on record. However, the growth of emerging economies and businesses reporting improved results shows that there are strong signs that recovery is on the horizon. Though the industry remains optimistic about the future, the expectation is that there is still a way to go before unemployment levels start to reduce significantly.
Where’s the Money?
It is interesting to consider which regions are making money now. Although the US and the eurozone were the world’s strongest markets in 2009 with $14 and $12 trillion respectively, both markets had shrunk: the US by 3% and the eurozone by 4%. And while China and India have relatively smaller GDPs, the startling trend there is that while other economies were shrinking, both countries demonstrated growth: 9% for China and 6% for India. In fact, it is expected that by the end of 2010, China will surpass Japan and rank number two in global GDP.
Semiconductors Drive Recovery
This recession has hit the industry hard, but as many companies start the process of refilling depleted inventories, the semiconductor market is recovering more quickly than some expected.
Starting at around 17% in 1994, the growth rate of the semiconductor industry has been gradually, and for the most part fairly steadily, decreasing. Today, the growth rate hovers around 5-6%, which is about right for a steady-state growth rate for an industry. And in the face of the recent recession, it is still substantially better than the recent GDP growth rates of most countries. In fact, it is likely that semiconductors will be central to driving the recovery of many regions.
Since Q4 2008, when the recession was at its worst, most semiconductor companies have continued to report improved results in their earnings releases, providing further evidence that economies are starting to recover.
Memory foundries, especially, have recovered strongly. Having invested very little in new equipment for the last three years, they are now using their current production capabilities to maximum capacity.
Predictions for 2010
Video applications are set for huge growth, driven by mobile, high definition and 3D products. As a consequence, both bandwidth and storage need to expand massively to cope with the increasing demand for data.
There will also be continued development within cloud computing technologies to make computers available over the Internet. Forecasters also see the energy sector investing more in generation, storage and conservation technologies, and smart grids are becoming increasingly important.
For 45 nm process technologies, Synopsys has seen an extension of the standard two-year “time-to-400 tapeouts”.
Figure 2: Time to Market for Advanced Designs
Furthermore, two clear customer trends have emerged. Many customers are choosing to skip nodes by taking advantage of an existing platform to perform multiple derivatives, while others are opting to ‘squeeze’ older nodes to manage costs.
Traditionally, moving from one process to the next has halved cost per transistor. That’s not to say that chip prices have reduced overall, because designers have consistently used more transistors with each design, which means chip prices have remained constant at about $1.
Now a good deal of the value of the SoC design is in integration as designers are choosing to implement more functions in software as functionality expands faster than Moore’s Law. Others are finding integration between chips (system in package) an attractive way to mitigate design risk.
Figure 3: ROI on Moore’s Law is Falling
However, the return on investment from Moore’s law is falling with advanced processes (Figure 3). It is now impossible to achieve the traditional 50% cost reduction by moving to smaller nodes. If current trends move forward unabated, it may be difficult to realize an economic benefit from moving to an 18 nm process.
That is why improving design productivity has become such a focal point for Synopsys’ R&D.
Aart de Geus
Since co-founding Synopsys in 1986, Dr Aart de Geus has expanded Synopsys from a start-up synthesis enterprise to a world leader in electronic design automation (EDA). As a technology visionary, he is frequently asked to speak on topics related to the electronics industry. As one of the leading experts on logic simulation and logic synthesis, Dr de Geus was made a Fellow of the Institute of Electrical and Electronics Engineers (IEEE) in January 1999. He was also honored for pioneering the commercial logic synthesis market by being named the third recipient ever to receive the IEEE Circuits and Systems Society Industrial Pioneer Award. In 2002, shortly after transacting the largest merger in EDA history, Dr de Geus was named CEO of the Year by Electronic Business magazine; and in 2004, Entrepreneur of the Year in IT for Northern California by Ernst & Young. In November 2005, Electronic Business magazine chose Dr de Geus as one of "The 10 Most Influential Executives." Dr de Geus is active in the business community as a member of the board of the Silicon Valley Leadership Group (SVLG), TechNet, the Fabless Semiconductor Association (FSA), and as Chairman of the Electronic Design Automation Consortium (EDAC). He is also heavily involved in education for the next generation, having created in 1999 the Synopsys Outreach Foundation, which promotes project-based science and math learning throughout Silicon Valley.
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