Decisions about what kinds of chips will be developed are changing, and not for the usual reasons.

While there have always been technological challenges in developing semiconductors—many companies believed that 1 micron was the wall—business decisions are entering into the picture at a level never seen before. Some companies are running their chips for two process nodes instead of one—skipping an entire node in between—and then deciding whether it’s even worth going to the next node or simply taking a half step. The foundries are working furiously to add half-nodes all the way down the Moore’s Law road map.

But for some companies, it’s not even the question of what process node is being used. Complexity has gotten way out of control. Yes, it’s still possible to build almost anything onto a chip. You can add five new functions and myriad power domains that switch on and off like a strobe light to conserve energy. You can add in technologies like air gap at 22nm and use self-assembly techniques, double patterning, EUV (well, maybe) and perhaps even some biochemical processes several nodes in the future.

But the simple truth is that by the time you overcome all of these obstacles, verify the chip and plug all the holes, the money may have been better spent on other parts of the system. Maybe you don’t need to add multiple cores to a chip. Maybe there won’t be software to take advantage of it. Or maybe you’ve found that fixing glitches in software after the chip has already gone to manufacturing works well enough.

A slowing economy and growing competition, primarily based upon price, is only adding pressure to do more with less. It’s not that there will be fewer chips or design starts. Given the role of semiconductors and systems on chips in almost every aspect of life, the design starts will likely increase over the next decade. But the question is what kind of chips will companies be creating? Will they be at the 32nm process node, or will they be at the 80nm node, with a full complement of software?

What do you think the future will hold for chip development? And what kind of chip do you think companies should be developing? 

When we first sat down last year and began banging out the structure for System-Level Design, we asked a lot of questions of engineers and vendors.

That’s easy for journalists. It’s what we do for a living. It’s a lot tougher for engineers to ask tough questions because the setting frequently isn’t conducive to open exchanges. There are issues of how you’re perceived within your own company, and issues about whether you will give away the crown jewels. We, on the other hand, are used to getting doors slammed in our faces, phones going dead, e-mails bouncing back and people screaming all sorts of stuff that should never find its way into print.

But one thing we heard loud and clear from engineers is that they do want questions asked–preferably by us–about issues that affect their work and their job. We’re here to help. We won’t check out everything, and we won’t necessarily take the angle that people ask. But we will dig to the bottom of issues and figure out what’s really happening.

The first of these stories appear in this month’s issue of the System-Level Design newsletter. One is a survey of engineers about what tools they use and which markets they develop. The second is a look behind the curtain at what’s going on to bridge the gap between OVM and VMM. Both stories were prompted by readers like you.

We urge you to continue asking us to find out what you can’t.

It’s been rumored since last spring that Mike Fister’s resignation as CEO of Cadence Design Systems was imminent. What’s surprising isn’t that he finally stepped down. It’s more a question of why it took so long.

Most observers believed Fister would keep the top spot until just after the Design Automation Conference in June. Others thought it would happen when Cadence’s board found a suitable replacement—possibly even trying to lure former CEO Joe Costello back.

Neither of those scenarios proved accurate, at least partly because of Cadence’s bid for Mentor Graphics in June. That bid threw schedules completely off track, leaving many wondering why a company that was sliding—Cadence’s profit was down 92 percent in Q2 even though sales were only down 16 percent year over year—would bid for a company that was showing strong growth.

Most concluded it was a smokescreen. Maybe. It also might have been a delay tactic. Cadence withdrew its bid to acquire Mentor on Aug. 15, amid clamor by engineers that the merger would be bad for EDA.

Maybe Fister and his executive team truly believed they could turn things around and needed time. But given the huge number of empty office at Cadence, it was clear that the company was cutting positions to shore up its balance sheet without getting the kinds of returns it needed to boost sales. The problem with cutting staff is you can only make those kinds of cuts once. After that, there’s nothing left to cut.

This is rather evident in Cadence’s 2007 annual report. In the opening message, Fister said: “In 2007, we continued to execute on our strategy of providing increased value to our customers through enterprise-level solutions. I am pleased to report that we also executed well against our financial targets. We achieved revenue of $1.62 billion in 2007, an increase of 9 percent compared to 2006. Earnings per share increased to $1.01 from 46 cents as we achieved our operating margin targets while generating $402 million of operating cash flow.”

Notice the emphasis on operating margin targets versus profits. This is classic corporate spin. Any company doing well talks about profits right up front.

This isn’t to say Cadence is in trouble. From a technology standpoint, there is still plenty to brag about. But Fister was recruited by former CEO Ray Bingham because of his deep customer contacts at places like Intel, Fister’s previous employer. Fister is a very smart executive with extremely deep industry knowledge, but his track record at Intel now looks suspiciously like his record at Cadence.

The blame is partly Fister’s. He’s been charged with running the company, and it languished under his watch. But at least as much, if not more, of the blame should be put on the board of directors. It was obvious something should have been done months ago. Where were they?

What effect do you think this will have on the design world?