Comprehensive Innovation Management for Semiconductor Firms: Leading Practices, Capabilities and Tools by Joe Dury and Devin Bedwell

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Comprehensive Innovation Management for Semiconductor Firms: Leading Practices, Capabilities and Tools by Joe Dury and Devin Bedwell Comprehensive Innovation Management for Semiconductor Firms: Leading Practices, Capabilities and Tools by Joe Dury and Devin Bedwell VIEWPOINTS ON INNOVATION A PUBLICATION Executive Summary Semiconductor companies In 2009, Kalypso published a white paper are committed to consistently titled Semiconductor Product Lifecycle deliver meaningful growth Management: Industry Adoption, from innovation — a promise Benefits, and The Road Ahead. The few are prepared to deliver. paper highlighted the growing trend of leading semiconductor companies Without a clear innovation using Product Lifecycle Management strategy and roadmap, these (PLM) tools – specifically product data companies, and those held management (PDM) – to accelerate accountable for their results, product development, improve product Comprehensive Management Innovation Semiconductor for Firms are doomed to fail. quality, and reduce costs. Early adopters of PLM/PDM technology in the industry This paper reviews some of the leading saw development cost reductions of practices and enhanced tools that up to 40%, coupled with improved top companies in the semiconductor methods to efficiently support product industry use to stay ahead in an teams. In the years since that paper industry where comprehensive was published, leading semiconductor innovation management is companies have adopted a suite of becoming a critical requirement. more sophisticated processes, tools, and practices to cover the full innovation ON INNOVATION ON process and get new products to the market faster and cheaper while delivering on growth targets. VIEWPOINTS 2 Innovation progress has been good, Benefits of this more comprehensive but for most companies, the tools approach include reduced development and processes in place today are not costs, improved product quality, and sufficient to drive innovation with maximized return on Research and the new technology and increasing Development (R&D) investments. complexity of semiconductor products These improvements not only deliver of tomorrow. To achieve true on pressing cost-saving and margin- innovation results transformation, enhancement initiatives, but start all semiconductor firms must now the company on a path towards move beyond PDM and place more comprehensive innovation management. emphasis on first pass design success, efficient product introductions, and manufacturing flexibility. Comprehensive Management Innovation Semiconductor for Firms This will require a specific set of enhanced innovation capabilities, including: • A development product record that goes beyond existing product data record capabilities with a product data model that supports all phases of the development and innovation process • Portfolio and pipeline management tools and practices to unite engineering ON INNOVATION ON and development teams with corporate strategy and customer demand • Customer requirements management capabilities to align engineering and development teams with customer requirements and specifications, VIEWPOINTS and to identify and fix problems early in the design cycle 3 Scale and Collaboration Challenges in an Increasingly Complex Industry In order to stay ahead in the market, on new process nodes. Products that used to semiconductor companies need to remain contain 15 – 30 application blocks now have agile and quick-footed, with a focus on over 150 blocks, and design teams with 50 innovation and execution. Semiconductor engineers now require over 200 engineers companies have tools and processes in place spread across the globe. The cost of the to manage innovation today, but chips are development library, IP generation, and chip getting more complex with tighter product design for a 28nm System on a Chip (SOC) is introduction schedules and more intensive over $350 million USD, and that will rise with resource requirements. Companies must each new technology node2. have established innovation processes, global manufacturing and design locations, Intellectual Rising design costs - driven by increases in Property (IP) organic growth processes or transistor and cell count - reinforce the need licensing mechanisms, and the right balance to minimize time to market and maximize Comprehensive Management Innovation Semiconductor for Firms of technical capacity and capability to keep up in-market lifespans to pay for the new with the latest technological trends. technologies. Multiple re-spins and design flaws delay product launches, reduce the revenue The ability to scale these processes and life of the new product, and can even displace capabilities to support new products and the socket to a competitor. To deal with rising technologies is the key to future success. cost and complexity, semiconductor companies must have efficient design processes that can INCREASING DESIGN COMPLEXITY 190 scale to new technologies and ensure not just Design Cost ($M) Application Blocks $164 165 a successful tape-out, but also a successful, $104 81 $68 profitable and timely customer launch. $36 38 $18 16 Disparate Computer-aided Design (CAD), PLM, and New Product Introduction (NPI) tools need 90NM 65NM 40/50NM 32/28NM 22/20NM INNOVATION ON Process Technology Node to be integrated with instantaneous information Figure 1 Design Complexity1 sharing and communication environments to enable globally managed processes, changes, Figure 1 shows the increasing design and interdependent design tracking that is complexity as new products are introduced accessible by all teams and all locations. VIEWPOINTS 1 Source: International Business Strategies 2 Kay, Roger (2012, March 16), Rising Stakes In Semiconductor Game Squeeze Out All But A Few, Forbes Magazine 4 Equally important to NPI execution and in- need instant visibility into qualified processes, market lifespan is ensuring that resources tools, vendors and engineering teams to get are being used to develop the right products parts quickly to the end customers. Product, that customers want. Better visibility to the test and reliability teams each use their own product portfolio enables maximum alignment systems, Design Automation/CAD platforms, with customer needs and their own financial in-house tools, and processes. Efficient performance. collaboration is essential to the NPI process and can lower development costs, increase IP reuse, The need for visibility and constant compress development schedules, and improve collaboration has never been greater. To ensure product quality. that global and regional customer needs are met, typical semiconductor NPI efforts require Despite the challenges that the industry faces several hardware and software design teams, today, leading semiconductor companies can along with applications, product, reliability, maintain an innovative edge in a complex test, and production engineering teams across industry with enhanced practices and tools to the globe working in concert with global sales handle the increasing design complexity, manage and marketing teams. Internal manufacturing, portfolio decisions, and to increase global Comprehensive Management Innovation Semiconductor for Firms external foundries, internal and external final collaboration throughout the NPI process. manufacturing, wafer probe, and test locations ON INNOVATION ON VIEWPOINTS 5 Three New Leading Practices for Innovation At Kalypso, we suggest an innovation results transformation approach, supported by leading new product introduction practices, processes and tools. We have found that leaders in the semiconductor industry all have enhanced tools and capabilities built around improving the same basic priorities to overcome industry challenges. These priorities can be summarized in three leading practices. 1. First Pass Design Success innovation and collaboration dramatically improve the quality of their designs, leading to The most successful semiconductor companies higher first pass design success, lower overall possess a relentless focus on first pass success development costs, faster time-to-market, and for new Integrated Circuit (IC) designs and increased product margins. product solutions. A successful first pass design minimizes time to market and development costs, and maximizes the revenue life of a 2. Efficient New Product Comprehensive Management Innovation Semiconductor for Firms new product. Design re-spins and software Introductions kit updates massively increase development costs and lengthen the time-to-market for new With expanding product portfolios and limited products, frustrating customers. Low quality resources, semiconductor companies constantly first pass designs also produce unacceptable have to do more with less. Executives at leading yields which drive up cost, decrease profitability semiconductor companies have visibility into and increase the final release and qualification NPI projects in all phases from ideation to requirements. One semiconductor company execution. Looking at the development pipeline recently had to delay the launch of their from two perspectives - current resource load flagship processor because of multiple design and future projects to be launched - ensures re-spins and low production yields. This resulted that both the monetary and human resources in angry customers and third party developers, are allocated correctly, customer requirements ON INNOVATION ON and ultimately a loss in market share and stock are met, and changes are made quickly enough price for the company. to respond to an evolving industry landscape. Producing and taping out high quality designs Senior managers in development
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