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Survey finds outsourced IC design slowdown

Posted: 24 Aug 2009     Print Version  Bookmark and Share

Keywords:chip design  outsourcing slowdown  ASIC 

2009 will be a make or break year for chip design service providers after the recession slowed the growth of outsourced chip design starts last year, according to a Gartner survey.

A survey of 40 vendors offering IC design services showed that outsourced chip designs grew only 6.5 per cent in 2008, compared to 34 per cent in 2007, Gartner said. However, outsourcing of back-end physical design starts at lagging-edge nodes (130nm and above) grew significantly in 2008.

With ASIC design starts expected to be down almost 22 per cent in 2009, it is "imperative that chip design service providers align their cost structure and sales and marketing strategies to the prevailing ASIC design start trends," according to a report by Gartner analyst Ganesh Ramamoorthy.

Growth in full-chip and partial design and back-end physical design outsourcing slowed to about 20 per cent, 24 per cent and 3 per cent, down from 27 per cent, 38 per cent and 52 per cent, respectively, in 2007, according to the Gartner survey.

The survey also showed that growth in chip design outsourcing by Asia/Pacific-based chip design service customers grew the fastest, Gartner said. Asia/Pacific-based survey respondents also reported the fastest growth in the number of outsourced design starts captured by them, Gartner said.

Deteriorating business conditions started to take its toll on chip vendors' plans for new chip designs in the third and fourth quarters of 2008, Gartner said. Chip design service providers and semiconductor IP vendors faced delays, cancellations and push-outs of design projects into 2009, the firms said. This had a clear impact on the number of chip design projects outsourced by chip vendors to third-party chip design service providers last year, Gartner said.

The results of the Gartner survey confirmed the firm's theory that the recessionary market conditions that prevailed during the third and fourth quarters of 2008 had an adverse impact on the third-party chip design service market, the firm said. In Q4 09, design service providers should prepare now to invest, especially in engineering resources, to meet a likely surge in demand for design services and support activity, according to Gartner.

Gartner is offering for sale a report titled "Vendor Survey Analysis: Recession Puts Brakes on Chip Design Outsourcing" through the firm's website.

- Dylan McGrath
EE Times





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