Obstacles and opportunities
The current political and economic environment presents some roadblocks to innovation in our industry, but it presents many opportunities as well.
By Rick Nelson, Editor in Chief -- EDN, March 19, 2009
The current political and economic environment presents some roadblocks to innovation in our industry, but it presents many opportunities as well. “Barack Obama has made the environment a priority in his administration. And the electronics industry will likely feel the impact as the new president of the United States changes federal environmental policies,” reports contributing editor Tam Harbert (www.edn.com/article/CA6631539). Potential negative impacts involve the need to pursue technical innovation in a tough economy while contending with what are likely to be increasingly stringent hazardous-materials restrictions and recycling requirements. Harbert reports that, during his campaign, Obama supported the regulation of electronic-waste disposal, reduction in the use of toxic chemicals during manufacturing, and the institution of more effective recycling programs—all worthy goals, to be sure, but not without costs.
On the bright side, the new administration’s priorities are likely to open or expand markets. “As the recession prolongs, our semiconductor customer community will look at what Uncle Sam is investing in,” says Rajeev Madhavan, chairman and chief executive officer of Magma Design Automation. “Uncle Sam is going to invest in green energy—whether it’s electrical-grid control, electric vehicles, or more optimized gasoline engines.”
The innovation to meet the needs of such applications, he says, will involve a move from big digital chips to mixed-signal designs. He’s confident that a new category of electric vehicles is emerging, noting that govern-ment financial support for the automakers will probably be tied to whether they come out with electric vehicles. “So, we are going to see big injection of capital from Uncle Sam in these areas,” he says, which will result in semiconductor companies migrating toward mixed-signal SOCs.
As for the impact on the EDA industry, Madhavan says, “We need to focus on the ability to put together mixed-signal designs in a fast, transferable fashion. Most of our customers have gone fabless, so you are not going to see these specialized fabs that analog companies used to have. Now, our customers need to figure out how to do analog- and mixed-signal CMOS in such a fashion that designs can all survive and be transferred from one technology node to the other in an automated fashion.”
How will the EDA industry fund the necessary innovation? “When the economy is in a recession, you have to fund initiatives almost by stealing from Peter to fund Paul,” he says. “You cannot just make arbitrary invest-ments; we have to be very agile in terms of investing in each of our technologies. We as a company have changed more and more to what I consider start-up mentality. Each group is very much fiscally responsible for having [only those] resources necessary to complete its engagements—to take its product to the next level. Our investments have to be tempered with actual economic facts.”
Contributing editor Harbert’s reporting reinforces Madhavan’s view of opportunities that the Obama admini-stration’s policies may offer opportunities amid the recession. She cites Daryl Hatano, vice president of public policy at the Semiconductor Industry Association, as saying that the ubiquity of semiconductors in many of the technologies that Obama is promoting create opportunities: “We think that semiconductors can revolutionize the generation, distribution, and consumption of energy and can transform the economy in the energy area the same way we transformed the economy through the Internet,” he says. Harbert’s reporting suggests that smart-grid, electric-vehicle, and other “green” technologies offer opportunities.
Is there a downside to the industry to energy-conservation efforts? Harbert quotes Parker Brugge, vice presi-dent of environmental affairs and industry sustainability for the Consumer Electronics Association, as saying that governmental mandates on power limits for consumer electronics could stifle innovation. “We'll definitely make a point to educate the incoming administration on how that could impact our industry and consumers.”
I think Brugge is selling short the innovative capabilities of the engineering community.
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>>The fact that "Uncle Sam" is going to be a primary customer is very tragic for our future.
Really? Aviation, Radar, Solid state devices, Integrated circuits, Internet, GPS all happened due to consumers in a "free market"? Were you equally sad when trillions (much of it borrowed) were spent by US for defence technology development (many times wastefully)?
At least a part of the economic crisis is fundamentally this: U.S. doesn''t have much of specialized skills to justify our high cost lifestyle compared to developing economies. Unless we do something new, it is only fair (by laws of economics) that our lifestyles gradually approach that of most peoples in the world.
Eugene Pebble - 2009-24-3 09:52:00 PDT -
It is very disapointing for the business community, in particular the technology sector, if this article represents a typical resonse to Government policies. Basically the article says: Who cares about free markets, Fascism can work also for us, as long as someone provides us with jobs.
The fact that "Uncle Sam" is going to be a primary customer is very tragic for our future. It is perhaps a business opprutunity, but one that is at the expense of our well being. In the Free market, we are forced to satisfy the demands and "wants" of the many consumers. Now we will be forced to satisfy the "wants" of uncle Sam. Uncle Sam is going to decide for all of us what we need and what we don't need. How does he (uncle Samp) possibly know what the consumers will want and what will work? This is nothing but a dictator shifting resources from the markets so it can serve itself.
Da A. - 2009-23-3 13:54:00 PDT
