One of the interesting things about technology is that, at least from the outside, it’s hard to tell what’s actually changing.

That’s not true on the inside, of course, where radical shifts are under way. The next big push in smart phones will be much greater intelligence. In the iPhone, Siri was just the tip of the iceberg. Future versions are likely to be much more interesting. Add to that the ability to more easily navigate between base stations and to intelligently manage power and performance throughout a battery charge and the changes under the covers will be enormous.

All of this requires far more compute power, much faster signal processing and routing, faster memory throughput, advances in coherency, and much more complex power management schemes. It will even require new architectures, which is why we’re headed down the path of 2.5D and 3D stacked die, pre-integrated subsystems and significant changes in software.

At the other end of the spectrum, these changes are equally prevalent in the data center, where improvements in efficiency and performance are significant enough to be line items on an operating expense budget. The emphasis on NVM Express and PCIe are just the start of what will prove to be a massive change in the way data is managed, stored and shared in the corporate enterprise, and it will require much more sophisticated electronics and software to make it all work.

Where electronics have been in more limited use, it’s far easier to spot what’s changing. In automobiles, for example, the shift from mechanical to electrical has opened up broad new opportunities for improving safety (even though some of this stuff is a distraction to the driver), adding convenience, and improving performance and fuel efficiency. What remains to be seen is ultimately how these inroads by electronics will change automobiles. Will they continue to be differentiated by the car vendors, or will they be differentiated by the makers of electronics the way a company like Apple has changed the music industry?

It’s easy to lose sight of the engineering feats in complex problem solving that enable these advances. It’s also easy for teams that accomplish these feats to lose sight of the bigger picture. All of these changes require an increasingly larger view of the system, big systems based on much more complex little systems, and all working together much more seamlessly than in the past. That means far more standards, more awareness of changes implemented on all levels, and more cooperation between groups that have never actually talked before.

So what will this ultimately mean for SoCs? Will it impede innovation as companies standardize on platforms and subsystems, or will it increase innovation as these platforms are called upon to drive more of the functionality in an ever-larger definition of the system? And who will assume the risk as complexity between groups continues to rise in an increasingly complex supply chain?

The changes on the outside may look like small changes to the consumers using technology, but underneath there is likely to be a lot of churn in all directions as technology continues to improve.

—Ed Sperling

Famed lawyer Clarence Darrow once said, “History repeats itself, and that’s one of the things wrong with history.”

While that basic theme has been argued throughout the history of civilization—smart people are supposed to learn from other people’s mistakes, not just their own—there’s an interesting twist when it comes system-level design. We are using the same technological approaches developed decades ago. In fact, we’re using some of the same ideas created centuries ago when it comes to the binary system. But we’re using it differently, and we’re getting infinitely better about how we use it.

The content is still garbage. We’re still recycling plays from ancient Greece and the late 1500s, and if you were to tune in to the majority of messages on instant messenger, Twitter, Facebook, and all the other international versions, it’s still useless drivel. It’s nice that people are brushing their teeth and taking a shower, but the rest of the world doesn’t need to know that.

Still, the approach to delivering that content, no matter how bad the subject matter, is changing. IBM invented virtualization back in the 1960s in mainframes to better utilize its processing capacity (and the scientists developing the first atomic bomb in New Mexico did something similar back in the 1940s), but now we’re using a similar approach to turn on and off many cores rather than worrying about bottlenecks of trying to fit all processing onto one. They’re there when you need them, quiet when you don’t. We’re also personalizing data delivery and making it mobile, for better or worse.

And while systems used to be a collection of discrete chips, they’re heading back in that direction again with stacked die. The difference is they now will have much higher bandwidth and a much more rational and flexible use of energy, memory, processing power. Over the next few years, designs will be much more granular and programmable, as much dependent on the software as the hardware, and ultimately defined by the user’s needs. Even the manufacturing of these chips is getting more granular, with atomic-level control of doping now very much a reality. These may be small steps—in fact, the steps may be on the nanometric or even picometric scale—but they add up to a very significant shift, and a very interesting one.

If SoCs can be built with this much control, then the convergence of almost everything that we have developed in decades of electronics can be carried around in your pocket without depleting an increasingly thin battery. There will even be some new tweaks thrown in, such as rock-solid security and privacy controls. Most of the content will continue to be garbage, of course. That never seems to change. But at least we’ll be able to experience it in new ways, in new places, and for much longer periods of time—and enabling that makes all of our lives much more interesting.

–Ed Sperling

This year’s DAC should be one of the more interesting shows in several years, although not for the usual reasons.

As an industry, we are just emerging from one of the worst downturns in decades. It started in December 2007, and various segments of the overall economy will begin picking up at different times, depending upon whether they’re leading indicators or trailing indicators. Netbooks and cell phones are selling well. Automotive electronics continues to suffer badly. And computers are recovering, although at much lower price points than in the past.

In the case of system-level design tools, there should be a very strong demand for the best in class and those with the best integration story. New chips are far more complicated to build than in the past, which means engineers need better tools for modeling, interfaces and DFM to ensure the chips can actually be manufactured.

Missing a market window at 45nm is expensive. At 32nm it can force a company to sell off some of its assets. And at 22nm, it actually can kill a company.

Feeding into this demand for tools is the fact that most chipmakers are short on staff. Companies cut engineering jobs during the downturn, and most will try to get through the short term hiring as little full-time help as possible. That means more focus on high-level abstractions and modeling, and more contract labor at the end of the design cycle when last-minute changes are necessary to hit a market window. The big question there is whether that contract labor will be up to speed on the newest tools and methods to be able to work as effectively as in the past.

This is a pivotal time in chip design, and system-level design tools are an integral part of this transition. But so are shifts in the job market for engineers, new skill requirements and globalization. That means lots of griping, lots of uncertainty and lots of questions—and right now it doesn’t appear there will be enough answers to satisfy most people.

So if you’re attending DAC, check out what’s happening on the show floor and in the conference rooms. But make sure to listen to what’s being talked about in the hallways. That may be where the really interesting stuff happens.

–Ed Sperling

The economy appears to have hit bottom. This is good news, but there are caveats.

First of all, not all industries will recover at the same rate. Communications never fully recovered from the dot-com bubble. Anyone who bet big on a communications recovery has either switched careers or retired. Now it looks as if the auto industry will be dragging for some time, and companies that hitched their future to that wagon will be feeling pain for some time. Electric cars are still little more than a second car for the rich and plug-in hybrids are still years from mass production—and in between, no one wants to plunk down a large sum of cash unless they have to.

Second, it also doesn’t mean the economy will recover quickly or that more jobs won’t be eliminated. Jobs are a trailing indicator, and virtually everyone knows someone out of work. That tends to dampen the exuberance to spend money. But system-level design is a leading indicator, if that’s of any comfort. Jobs should return to this industry first, even if they aren’t necessarily in markets that you know or in places that you want to live.

One of the best positive markers is the stock market. It bottomed out at 6520, and it could well plummet again. But with banks paying the lowest interest rates in decades for savings, many people have started returning to the markets. They may be ahead of the overall recovery, but that money can be used to fund business deals and get the economy moving again, which starts an upward cycle again.

Second, the stimulus money will begin filtering into the economy over the next few months, as well. That will add more fuel for businesses to spend money, whether responsibly or not. But at least there will be something to work with.

None of this means the economy will recover quickly. Even if the market goes up, it can seesaw for awhile. But we are seeing some positive signs of change, including predictions from foundries of a better second half and more design exploration that will lead to the purchase of new tools, new equipment and ultimately to tapeouts. The good news is that will leave us all thinking about time-to-market issues again—instead of the markets themselves.

—Ed Sperling

The strong get stronger in a downturn for reasons that aren’t readily apparent at the outset of the slump.

First of all, contracts that are in place at the outset typically don’t get canceled—at least not at first, and frequently not at all. In the system-level design world, those contracts can last as long as 18 to 24 months. Even if the number of derivative chips is scaled back, or killed altogether, there’s a cost involved in that. More commonly, companies opt to skip a process node and live with what they have longer.

Second, many of the startup companies competing with large established players in the system-level design market are funded by private investors. Those investments are made in A, B and C rounds (there are multiple other names that mean the same thing), and the funding is often doled out over periods of two years or more.

Finally, it takes time for a slowdown to really sink in. No one knows how long a downturn will last when it begins, and they don’t know how long an upturn will last. The dot-com bubble exploded violently in 2001 largely because it went on entirely too long at an unrealistic growth pace. The current downturn is following roughly the same course, filled with uncertainty because of the effects of globalization. There was less inventory, but the supply chain is much more dispersed.

Corrections eventually lead to overreactions on the part of customers, which is where the real damage to small companies gets done. The customers of the customers who develop systems now are asking for more integrated solutions rather than just chips. They want it complete with software, integrated and fully tested IP, and it has to work within a power budget that extends well beyond the chip itself.

It’s becoming too complicated—as in time-consuming and expensive—to integrate IP blocks from different vendors. It’s also too expensive to integrate point tools, which individually may be best of breed. And it may be getting to expensive to integrate homegrown tools, despite the fact that the development on those tools is already depreciated.

All of these changes take time to unfold. Market shifts are measured in years rather than months. You don’t starting looking to save pennies at first. You start with those places where you can save dollars and the lowest-hanging, most visible opportunities. IDMs outsourcing their production to foundries was an easy choice. Skipping process nodes was another. But now the focus is shifting to tools.

The first signal that something was amiss was when exit strategies for startups migrated from IPOs to acquisitions by large companies. That dramatically weakened their leverage to cash out at a premium. The next step was a sharp reduction in VC capital flowing into the ESL tools market, because with no easy exit the return on investment was far riskier. Following that came a cut in the amount of money available to EDA and ESL startups, because there was no reason to fund massive infrastructure if the companies weren’t going public.

Finally, with investments now considered riskier, venture money is shifting to lower-cost geographies such as China where the amount of startup capital needed is even lower. While labor costs are rising, it still costs less to hire engineers in China than in the United States, and a half-dozen engineers in China led by a U.S.-trained manager is much less of a financial risk than trying to build a company in Silicon Valley. It’s also much cheaper for a large company to buy an offshore startup or their IP and integrate it into their tools suite.

Add all of this together and the strong become even stronger. Downturns work in their favor because it costs even less money to add new tools or expertise. It remains to be seen whether an uptick in the market, probably beginning in the second half of this year, reverses this trend. But just as it took time to get to this point, it will take months if not years to figure out if it’s reversible.

–Ed Sperling

Downturns have a way of changing things forever—sort of like the earthquake of 1812, which permanently re-routed the Mississippi River in three places. And while the common thinking is that things will go back to where they were before, they never do.

For one thing, the trend isn’t just smaller, faster, cheaper. It’s also shorter development cycles. Incredibly complex chips now take 12 to 18 months to design, verify and produce, versus three years a decade ago.

The only upside is that the basic designs sometimes last longer before they become completely obsolete. Moore’s Law is slipping, if it even applies at all. Trying to fit the formula into multicore chips and, in some cases, stacked die, is a stretch. And many companies have abandoned the Moore’s Law approach altogether, saying that older process nodes are sufficient for getting the job done.

Another change that is irreversible is globalization. There are more opportunities, more markets, and more trained people around the globe. The downside is more competition for skilled engineers at all levels—and that trend will only grow.  What used to be done in the United States, Europe or Japan can now be done using global teams.

The silver lining is that the cost of labor is less of a deciding factor. Global companies are paying the same wages around the globe for top talent. Instead of being reduced to the lowest common denominator, some companies are paying top dollar for engineers no matter where they are. IBM is a case in point. Experts say that will become more common over the next few years.

That also will fuel new market growth in some densely populated areas, such as India and China, where the opportunity for growth dwarfs the market for every piece of electronics that has ever been sold. 

In the system-level design space, where engineers live and breathe complexity, that also means the creation of new approaches and tools. While many companies still develop their own tools, best of breed is becoming a necessity rather than an option. And black-box strategies, such as TLM 2.0 and IP-XACT, will become necessary evils among engineers who were trained to understand every step of every action they take. And like the other irreversible trends, once these are tried and implemented there is no turning back.

Like it or not, governments are going to be dictating energy policies in the very near future.

The scenario will start unfolding at the data center, make its way down to the device level, and ultimately land at the system level. At the chip design level, the situation will be particularly bad. For one thing, communication from the top never makes its way all the way down the food chain without an escalation in hysteria at each level. Companies are always afraid of telling their customers that they can’t meet their goals, so they simply pass along the message with a growing urgency to their suppliers.

The problem at the very top is that there are an estimated 1 million servers going online each year in the United States, according to The Uptime Institute, an independent research organization. That number of servers requires the construction of additional power plants, and it’s happening at a time when it’s difficult to get approval for any new plant construction. The situation is particularly bad in China, where power is being rationed in almost all major business centers. Adding more servers to the mix is not likely to be a welcome change, and concern over global warming makes additional power from anything but renewable sources highly unlikely.

From governments to power companies and so on down the line, you can expect lots of finger pointing. The companies buying servers and building new datacenters will demand more efficient machines, and the server makers will demand more efficient components to drive the servers. Software makers will point fingers at the hardware makers, saying they can’t build applications to take advantage of the multiple cores. Hardware makers will point fingers at the applications developers, complaining about bloated applications, operating systems and middleware.

Finally, everything will make its way down to the chip developers, who will be held accountable for fixing the whole problem. Somebody has to be blamed, and they’re the supplier of the supplier to the supplier of the customer. Blame flows downhill. It’s axiomatic, and it should be one of the first things they teach in business schools.

It doesn’t matter that the problems are caused at every level and that the system-level companies have done more than everyone else to fix it. In many respects, the blame should be shared by the end user. But figuring out who to blame may be less important than trying to get ahead of this problem. It’s always worse when the government gets involved in a problem first.