The big companies felt the pain first, or at least they acknowledged it. In big companies, pain is felt in dollars. In smaller companies, it’s felt everywhere because every person counts.

What the big IDMs did first was offload their fabs, or at least open them up for enough business to sustain their investments in new technology. That’s the strategy taken by IBM, and it appears to be the same at Intel and Toshiba. It was simply too expensive to do it alone.

Those who couldn’t sustain a fab, with the massive investment in equipment and process technology for each new node, became fabless. And many companies that started out fabless because there was no need to own a fab either thrived because they were in the right markets—think Broadcom, Qualcomm and a handful of others—or they struggled to raise their visibility because they didn’t own fabs and didn’t have that kind of direct communication.

Things are changing again. Outsourcing is on the rise, new business models are emerging and technology that was once considered an interim step—think FPGAs and off-the-shelf IP—has now gotten to the point where it’s sometimes as good if not better than what companies can create themselves, particularly with their ever-shrinking payrolls.

The interesting part of all this is that coming out of a downturn companies are more open to trying new things that can add efficiency or improve their final product. Downturns bring plenty of pain, both before and after, but they also bring some interesting changes that tend to stick around for quite awhile.

-Ed Sperling

For the past couple of decades, intelligence in a system was largely a function of the logic in a processor. That may change, given some of the disparate discussions now under way across the electronics industry.

Putting all the intelligence in one place can make the design process more efficient, but it doesn’t necessarily make the system more efficient, either from a performance or power standpoint. That doesn’t mean the central brain of a computer should give up overall management, but it does mean some of the decisions may have to be localized.

And yes, before I get pummeled with criticism, there has always been at least some embedded logic in certain areas. But just like corporate re-engineering in the 1990s, where companies like Accenture and McKinsey told executives to move the decision-making closer to the customer, the same has to happen in the semiconductor world. More decision-making needs to be discrete, with less of actual yes or no decisions made by the system processor.

What makes this approach intriguing are two relatively recent developments. One is power and performance. Localized decisions are quicker, require fewer processor cycles and can be done over shorter distances. The second is a function of physics. No one can build a chip with a powerful enough single core anymore to ensure that certain decisions have priority. And with more regular structures at 32nm and beyond, there’s no such thing as back-wiring or workarounds. You now have to design within the structure if you ever expect to get it verified and manufactured.

That calls for a different focus on the way intelligence is designed into a system, how it is distributed, the communication fabric between the various processing centers, and how information is prioritized. This is the same kind of challenge that many of the software engineers are working on now, namely how to parallelize applications. But for systems to really be optimized, the intelligence also has to be parsed out and parallelized, ultimately into different sized cores with different performance metrics. This is no simple task, but it could provide significant performance breakthroughs for far less power.

–Ed Sperling

There are signs that we are emerging strongly from the recession, and signs that we are still staggering. So which is correct?

Unfortunately, it’s both. The problem with the bulk of the electronics market now devoted to consumer spending is that there’s no compelling need to upgrade. There will always be replacements. Cell phones break. Cars fall apart. Even desktop computers burn up. But can people live with another six months of the same old television or hold off on the purchase of a new digital camera? Unless they’re complete technoshopaholics, the answer is definitely yes.

That wasn’t true when desktop computers ruled the industry and just to be able to stay current, competitive and still communicate with other companies you were forced to upgrade. Windows 7, from all reports, is significantly better than Vista. But you can still send e-mail and do spreadsheets in Vista. You just have to wait longer for the computer to boot.

And while the global demand for new products slowly climbs back out of the rubble, even oil prices are stuck at $75 a barrel, which means no compelling reason to immediately shift to alternative energy. It can wait a few months. And with technology changing so radically on automobiles, it’s hard to justify jumping into the market to purchase a new car when it may be considered a gas guzzling clunker in two years.

We are at a transition point in technology, where almost everything needs to be re-thought with power constraints in mind, and where the next compelling applications may be in areas that have never been huge drivers of the market—health care and alternative energy, for example. These are big growth markets, but it will take time to ramp them into the kind of frenzied momentum that carried much of the electronics industry in the 1980s and 1990s in computers and communications, and more recently in consumer electronics.

What’s different about these markets, though, is that they’re not replacement market or based on the whims and economic comfort levels of the consumer. They will be needs-based markets, similar to the early days of the PC, where advanced technology will be required rather than optional. That’s a huge difference because it’s subject to far less fluctuation than cell phone sales, but it still reaches and serves a sizeable of the globe’s population.

–Ed Sperling

Verification has claimed the biggest chunk of design time and cost for many generations of chips, but it has now been elevated from design headache to the poster child of what’s ailing semiconductor design.

The question being asked in many quarters, and also in many different ways, isn’t whether the verification approach and tools are right. It’s whether the fundamentals of design and building chips need to be re-thought from the ground up.

Unfathomable complexity, fear of failure and lack of understanding about new tools and models has led many engineers to question whether the industry needs to slow down the push from one node to the next. If chips cannot be verified on time and within a prescribed budget, then they are unlikely to get produced.

The first evidence of this is node skipping by chipmakers and the introduction of restrictive design rules by foundries. The next step is the introduction of verification IP all the way at the front of the design. What comes next is anyone’s guess. Some of the suggestions include platforms, programmability and entire blocks that can be built almost as a general purpose chip, with much more limited design flexibility.

What is clear is that we are at a tipping point where verification of all pieces of the chip—including application software—are becoming so time-consuming and complicated that something has to change. It may be the tools, it may be the overall approach to design, or it may be a combination of both. But without that, there may be far fewer chips rolling out the door at advanced nodes and what we have seen as progress in chip design for decades will slow dramatically.

–Ed Sperling