Evolving the D&A of semiconductor R&D
Evolving the D&A of semiconductor R&D
Insight

Evolving the D&A of semiconductor R&D

Leveraging data and analytics to create next generation R&D

Semiconductor CFOs, strategy, and corporate development professionals should incorporate D&A and Agile methodology into the R&D process. This can yield better ROI, bring more profitable products to market faster, and become a competitive advantage. With semiconductor R&D costs rising, there is no time to waste in evolving the R&D process.

It is well known that semiconductor companies reinvest a tremendous percentage of revenue back into R&D to sustain the breakneck pace of innovation that has driven the industry for the past 50 years. Increasing difficulty in achieving the improvements promised by Moore’s law and insatiable consumer demand for more features and functionalities have led R&D costs to outpace revenue growth.

We have found that applying D&A and Agile methodologies can yield tremendous value to the semiconductor R&D planning and product development process. By doing this, semiconductor companies can position themselves for a competitive advantage through:

  • Time to market – shortened design, continuous integration, and validation cycles enabled by Agile and D&A
  • Improved ROI on R&D spend – more efficient use of R&D resources and prioritization of the most important programs
  • Increased productivity – D&A empowering faster cycles of learning generated from the design databases across various teams and locations
  • Lower execution risk – use of common platforms ensure better integration of the design databases and lower risk of errors or delays when integrating design blocks from various components

Semiconductors CFOs, strategy and corporate development professionals should incorporate D&A and Agile methodology into the R&D process. This can yield better ROI, bring more profitable products to market faster, and become a competitive advantage. With seminconductor R&D costs rising, there is no time to waste in evolving the R&D process.

R&D costs spiraling

It is well known that semiconductor companies reinvest a tremendous percentage of revenue back into research and development (R&D) to sustain the breakneck pace of innovation that has driven the industry for the past 50 years. In 2015 and 2016, U.S. semiconductor companies invested over 18 percent of revenue in R&D1. 2017 will be a banner year for the semiconductor industry with revenues expected to grow by almost 20 percent2 to over US$400 billion, the highest growth since 2010. So if past trends hold true, R&D investment will also be at a historic level. The 2017 revenue growth has been triggered by favorable memory pricing and the first PC refresh cycle since tablets have come to the market. But historically, the semiconductor industry grew by an average of 5 percent annually from 2008 to 2017, down from the 11 percent average growth in the 90s leading up to the financial crisis. After higher than expected growth in 2017, growth in subsequent years is expected to normalize to 4–5 percent. As we look ahead into the future, the trends highlighted below and their implications will shape the landscape of the semiconductor industry.

Evolving the D&A of semiconductor R&D

Leveraging data and analytics to create next generation R&D