A recurring theme from eSilicon is “Do it yourself is dead”, that is, when it comes to internal operations. By, internal operations, I mean all those activities from netlist to EOL (end of life). After all, nobody makes their own EDA tools or wafers. So, why are there a thousand companies with teams of 5 to 200 all doing the same job and, in many cases, poorly? How good can you be at making one or two 65 or 40 nm chips a year? Where’s the learning curve? How do you justify the idle time? Where’s the buying power? And the fixed cost!
Anyway, I was talking recently to an operations professional that I have known over the years and said, “You know you’ll be working for eSilicon soon.” He replied with a, “How’s that?” I went on to tell him to imagine me standing in front of his CEO, CFO and VP of Sales saying, “No matter what [Fred] makes your chip for, I’ll do it for five percent less and guarantee it”.
His eyes widened and said the usual, “But I have the double secret, sacred handshake with [supplier] and I’m the only guy in the world that has his substrates delivered by carrier pigeon daily at noon”; and ten other operations myths we hear all the time. I countered with, “Great, like I said, five percent cheaper and guaranteed”.
This time his head fell and he said, “But I love going to Asia and getting all that supplier attention and, besides, what will I do?” You get the picture. Operations guys working in small and medium sized companies will be working for the aggregators soon much like EDA absorbed the thousands of developers dotted across the electronics landscape. The economics of a slowing industry demand it and it is unavoidable. And, why not? How much waste can an aging industry absorb before management looks around and says operations has to go, like EDA, fabs, assembly, IP, layout and everything else? It’s inevitable and it’s happening now.
Like the admonition from the Borg on Star Trek, “Resistance is futile. You will be assimilated”.
