Experience can delay innovation — and let new competitors pass you by

According to Kurt Shuler, regarding a presentation about four best practices “learned from the most successful SoC companies”.

What stops people from doing best practices that at first look seems obvious?

The more experienced a team is, the harder it usually is for them to change or adopt new methods. This is because it is simpler in the short term to patch what isn’t working any longer, rather than solve the issue for the long term. It’s easier in the long term to continue doing things, “the way we do things around here.”

The problem is that there are new competitors to the fabless companies. And they have less legacy experience and are eager to adopt best practices and become world class right away. I’m not talking about the new companies in mainland China creating world-class SoCs; rather I’m talking about the fabless semi vendors’ best customers!

I spent some time explaining a simplified view of the semiconductor value chain (slide 11), highlighting companies like Google, Amazon, Microsoft, Apple and eBay that have hired their own chip design teams to either design custom chips, or to provide very specific requirements and even IP to incumbent fabless companies. A look at slide 12 shows how much more cash these companies have than their fabless semi suppliers. And a quick search of LinkedIn will show how extensively they have hired chip design talent from our industry.

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