Outsourced chip design starts up 20%, Gartner reports

A Gartner survey finds that outsourcing of key design support services such as IP integration, RTL synthesis, verification, analog and mixed-signal design and consultation, physical library, and IP qualification and hardening, are on the rise.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 5/12/2008

Outsourced chip design starts grew by 20% in 2007, according to a recent Gartner Inc survey.

Gartner surveyed 62 vendors offering integrated circuit design services and found strong growth in designs of 90 nm or below. In 2006, the first year of the survey, 29 design service companies responded. That more than doubled to 62 last year, representing nearly 35% of all vendors worldwide, Gartner today reported in its Semiconductor DQ Monday Report.

“The highlight of this second survey is the continued growth in the number of outsourced chip design starts,” Ganesh Ramamoorthy, a Gartner analyst, wrote in the weekly report. “The total number of design starts captured by survey respondents grew by about 20% in 2007, with respondents reporting strong early growth at process node levels of 90 nm and below.”

According to the survey, partial design starts grew 52%, while full-chip design starts grew 28%. Physical implementation starts at 90 nm or below accounted for nearly 32% of all physical implementation starts during 2007, the survey also found.

Further, the survey found that outsourcing of key design support services such as intellectual property (IP) integration, resistor transistor logic (RTL) synthesis, verification, analog and mixed-signal design and consultation, physical library, and IP qualification and hardening, are on the rise.

Not surprisingly, the Gartner reported that Asia/Pacific-based survey respondents accounted for 70% of total design starts captured.

“The survey findings confirm Gartner's belief that the chip design outsourcing market will continue to grow at a steady pace in the coming years,” Ramamoorthy said. “Design service vendors that position themselves as providers of specialist integrated circuit (IC) design skills need to expand their capabilities to include verification, integration, and IP supply, and should position themselves as a one-stop shop for all services relating to semiconductor design.

“Full-chip design contracts are certainly more lucrative, but not all chip vendors will outsource the full-chip design — especially with fewer chips being designed every year,” he continued.

“Therefore, it is imperative that design service vendors broaden their skills and service portfolios to provide partial design services for specific designs (or across multiple stages of a design),” Ramamoorthy concluded.