Analysis: Chip design outsourcers must embrace IP

Jim Tully, Gartner Group
(02/24/2006 7:06 PM EST), EE Times

Design services companies have been providing a valuable service to electronic system OEMs and semiconductor vendors for years. But the reasons for outsourcing electronic design are changing.

Before the market crash of 2001 the primary reason centered on shortages of engineers. We found this consistently in surveys and discussions with vendors. When vendors had insufficient internal resources for a project–normally during periods of high market growth–they would use outsourcing services. The economics of the industry changed in 2001, probably permanently. The main driver today is cost. Vendors will now primarily outsource design activities as a part of a cost reduction program.

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