New-Tech Europe Magazine | Q1 2023

Industry Outlook 2023: Four IC design megatrends to watch

By Joe Sawicki, executive vice president, IC EDA, Siemens Digital Industries Software

Despite the uncertainties in the current economic and geopolitical landscape, 2022 was a stellar year for electronic innovation, and I am sure in 2023 we’ll see continued innovation in the IC and electronic systems design industry. Here are some megatrends in the industry that I think are worth monitoring in the year ahead. Megatrend 1 – More systems companies becoming vertically integrated and designing ICs Ten years ago, systems companies accounted for roughly one percent of IC foundry capacity. Today they account for over 20 percent. A greater number of systems companies in a wider range of industries are developing their own ICs. Why? There are primarily two major trends driving systems companies to design

their own ICs. First, at the base level there’s an economics issue. A greater percentage of the value of the system is captured in semiconductors, so naturally there is a desire for systems companies to accrete more of that value and design their own ICs. Second, and perhaps even more important, is the opportunity for internally designed semiconductors to create innovative and differentiating system value. All of today’s advanced electronic systems are “smart.” But how you apply that embedded intelligence and optimize the performance of your devices to achieve that intelligence are key factors to both differentiating a product as well as improving that product’s profitability. A prime example of leveraging IC design for greater system value is Apple. Years ago, the company made a decision to go to 64-bit computing before any other application company. They did so not for 64-bit’s

additional address space, but to have more efficient and less power-hungry memory access. In other words, it allowed them to provide mobile devices that ran faster and longer than the competition. Their competitors followed suit. A lot of companies are turning to AI & ML at all levels of system design to add greater degrees of differentiation to their systems and to ultimately make their systems smarter than the competition’s products. As we find more AI becoming a part of edge-based devices, we are finding that the leading companies in this space achieve greater degrees of differentiation by building their own optimized AI accelerators rather than using off-the-shelf AI accelerator IP. This allows companies to optimize their systems for the best overall system functionality power and performance, while also making it harder for the competition to become fast followers.

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