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2005 Design Outsourcing Study
2005 Design Outsourcing Study
Design Outsourcing Study
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Web survey: Fieldwork dates
December 15th - December 31st, 2005
303 usable responses (confidence interval +/- 5.5%)
Sample frame: EE Times and Electronics Supply & Manufacturing
readers Management positions Involved with making design outsourcing decisions
Methodology
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Experience with Design Outsourcing
Three to less than five years
21%
Two to less than three years
15%
One to less than two years
10%Within past year
16%
Ten or more years16%
Five to less than ten years
22%
2. For how long has your company outsourced at least a portion of its design activity?2. For how long has your company outsourced at least a portion of its design activity?
N (Those who currently outsource or plan to outsource to a 3rd party) = 191
Mean = 4.7 years
Mean = 4.7 years
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Locations of 3rd party design firms
2a. What are the locations of the 3rd parties to which you outsource design? 2a. What are the locations of the 3rd parties to which you outsource design?
18%
10%
8%
6%
3%
18%
23%
31%
80%United States
China/Taiwan
India
Canada
Western Europe
Other Asian countries (other thanChina/Taiwan and India)
Eastern Europe
Mexico
South America/Latin America
Net by Geography
Americas: 84%
Asia: 47%
Europe: 23%
Net by Geography
Americas: 84%
Asia: 47%
Europe: 23%
N (Those who currently outsource or plan to outsource
to a 3rd party) = 190
N (Those who currently outsource or plan to outsource
to a 3rd party) = 190
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Proportion of designs outsourcedCurrent vs. prospective
3a. What proportion of your company’s total number of design projects in the past 12 months included some design outsourcing?
3b. In two years, what proportion of your company’s total number of design projects will include some design outsourcing?
3a. What proportion of your company’s total number of design projects in the past 12 months included some design outsourcing?
3b. In two years, what proportion of your company’s total number of design projects will include some design outsourcing?
N (Those who currently outsource or plan to outsource to a 3rd party) = 187
48%41%
52%59%
In two yearsPast 12 months
Mean = 37%Mean = 37% Mean = 43%Mean = 43%
30% or less30% or less
More than 30%
More than 30%
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Projection of design outsourcing activity in next two years
Decrease11%
Stay the same34%
Increase55%
12. In the next two years, the proportion of design work that is outsourced from the proportion your company now outsources will...
12. In the next two years, the proportion of design work that is outsourced from the proportion your company now outsources will...
N (Those who currently outsource or plan to outsource to a 3rd party) = 190
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Design activities outsourced
3c. Does your company outsource…3c. Does your company outsource…
29%
40%
55%
60%Software design
Board level design
Chip level design
Entire system design (includingenclosure/case, display, software,
hardware, etc.)
N (Those who currently outsource or plan to outsource to a 3rd party) = 191
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Chip level design activities outsourced
4a. Which of the following chip level design activities does your firm outsource?4a. Which of the following chip level design activities does your firm outsource?
50%
46%
46%
38%
37%
37%
37%
29%
15%
58%
61%
61%
62%Logic verification
Physical chip design
Synthesis and analysis
RTL design
Analog/mixed-signal/RF circuit designChip extraction, analysis and design rule
checkingPackage design
Analog/RF verification
Architectural design
Design testing
Firmware or software design
Firmware or software verification
Defining requirements
N (Those who currently outsource chip level design activities to a 3rd party) = 76
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3rd party design firmsChip level design
4c. To which types of 3rd parties does your firm typically outsource chip level design?
4c. To which types of 3rd parties does your firm typically outsource chip level design?
20%
1%
32%
32%
45%
65%Design consultancies
Fabless semiconductor vendors
Foundries
Original design manufacturers(ODMs)
EMS providers
Other
N (Those who currently outsource chip level design activities to a 3rd party) = 76
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Board level design activities outsourced
5a. Which of the following board level design activities does your firm outsource ?5a. Which of the following board level design activities does your firm outsource ?
40%
34%
32%
27%
26%
19%
45%
47%
62%
82%PC board layout
Board level circuit design
Firmware or software design
Design for manufacturability/test
Design verification
Component evaluation and selection
Power and thermal analysis
Firmware or software verification
Managing bill of materials
System verification
N (Those who currently outsource board level design activities to a 3rd party) = 103
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3rd party design firmsBoard level design
5c. To which types of 3rd parties does your firm typically outsource board level design?
5c. To which types of 3rd parties does your firm typically outsource board level design?
9%
3%
10%
26%
32%
78%Design consultancies
Original design manufacturers(ODMs)
EMS providers
Foundries
Fabless semiconductor vendors
Other
N (Those who currently outsource board level design activities to a 3rd party) = 103
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Software design activities outsourced
6a. Which of the following software design activities does your firm outsource? 6a. Which of the following software design activities does your firm outsource?
29%
33%
47%
49%
77%High level coding and debug
Software verification
Assembly and hardware-dependentcoding and debug
Real time operating systemoperation and selection
Architectural design
N (Those who currently outsource software design activities to a 3rd party) = 112
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3rd party design firmsSoftware design
6c. To which types of 3rd parties does your firm typically outsource software design?
6c. To which types of 3rd parties does your firm typically outsource software design?
5%
7%
6%
14%
23%
86%Design consultancies
Original design manufacturers(ODMs)
EMS providers
Fabless semiconductor vendors
Foundries
Other
N (Those who currently outsource software design activities to a 3rd party) = 110
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3rd party design firmsSystems design
7. To which types of 3rd parties does your firm typically outsource entire system design?
7. To which types of 3rd parties does your firm typically outsource entire system design?
8%
6%
14%
14%
53%
57%Design consultancies
Original design manufacturers(ODMs)
EMS providers
Foundries
Fabless semiconductor vendors
Other
N (Those who currently outsource entire system design to a 3rd party) = 110
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Evaluations of outsourcing
8. What has been the impact of design outsourcing for your company? What has been your evaluation of
your firm's decision to outsource design activities?
8. What has been the impact of design outsourcing for your company? What has been your evaluation of
your firm's decision to outsource design activities?
51%
54%
53%
46%
60%
31%
32%
27%
23%
31%
28%
34%
41%
28%
33%
24%
20%
20%
18%
18%
13%
13%
12%
57%
53%
44%
36%Project risk
Communication with 3rd partyoutsourcer
Total development cost
Total time of project
Compliance with design requirements
Overall time to market
Reduction of our firm’s own headcount
Unit cost of product
Quality of 3rd parties’ design tools
Very positive + Somewhat positive Neutral Very negative + Somewhat negative
N = Those who currently outsource or plan to outsource to a 3rd party
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Impact of design outsourcingAsset or liability?
Net liability21%
Net asset79%
9a. Overall, would you say that design outsourcing has been a net asset for your company, or a net liability?
9a. Overall, would you say that design outsourcing has been a net asset for your company, or a net liability?
N (Those who currently outsource or plan to outsource to a 3rd party) = 190
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Problems encountered during design outsourcing
10. What problems have you encountered in outsourcing design activities? 10. What problems have you encountered in outsourcing design activities?
30%
22%
21%
6%
31%
46%
59%
65%Project took longer than we first
thoughtCommunication problems with 3rd
party
Higher total costs than anticipated
3rd party lacked managementability
3rd party lacked key designresources
3rd party lacked design skills
Project failed to meet requirements
Other
N (Those who currently outsource or plan to outsource to a 3rd party) = 166
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3rd party locationMost positive experience vs. most negative experience
11a. As you think about your most positive design outsourcing experience, where was the 3rd party located?
11a. As you think about your most positive design outsourcing experience, where was the 3rd party located?
4%
3%
3%
1%
1%
49%
16%
2%
15%
6%
6%
3%
2%
1%
6%
6%
7%
70%United States
India
Canada
China/Taiwan
Western Europe (including UK)
Asia other than China/India
Eastern Europe
Mexico
South America / Latin America (Otherthan Mexico)
Other
Most Positive Experience
Most Negative Experience
Positive
Americas 77%
Asia 16%
Europe 8%
Positive
Americas 77%
Asia 16%
Europe 8%
N (Those who currently outsource or plan to outsource to a 3rd party) = 180
Negative
54%
37%
9%
Negative
54%
37%
9%
11b. As you think about your most negative design outsourcing experience, where was the 3rd party located?
11b. As you think about your most negative design outsourcing experience, where was the 3rd party located?
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Attitudes toward outsourced design projects
13. Please tell us whether you agree strongly, agree somewhat, disagree somewhat or disagree strongly with each of the following statements. Our design
projects…
13. Please tell us whether you agree strongly, agree somewhat, disagree somewhat or disagree strongly with each of the following statements. Our design
projects…
69%
54%
44%
43%
75%
77%
77%
83%Receive a great deal of attention from
senior managementRequire the close collaboration ofhardware and software designers
Will be sold in a market that is very costsensitive
Represent “state of the art” or “leadingedge” technology
Generally have a very short time tomarket window
Are meant to be part of a high-volumeproduct
Are primarily focused on cost-savingsfor existing designs
Are generally simple revisions to anexisting design
‘Agree Strongly’ + ‘Agree
Somewhat’ responses
‘Agree Strongly’ + ‘Agree
Somewhat’ responses
N = All respondents
Our design projects…Our design projects…
Design Outsourcing Study
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Views on design outsourcing
13. Please tell us whether you agree strongly, agree somewhat, disagree somewhat or disagree strongly with each of the following statements.
13. Please tell us whether you agree strongly, agree somewhat, disagree somewhat or disagree strongly with each of the following statements.
35%
33%
45%
51%
53%
61%Gives us access to design
resources that we can’t otherwiseafford
Has allowed us to meet our time tomarket requirements
Is far more difficult than we firstimagined
Gives us entrée into new orregional markets
Gives us the ability to handle“green” or environmental issues
Is generally targeted at our matureproducts
‘Agree Strongly’ + ‘Agree
Somewhat’ responses
‘Agree Strongly’ + ‘Agree
Somewhat’ responses
N = All respondents
Design outsourcing…Design outsourcing…
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%Director/Senior Management 36Principal Engineer 10
Department Head 9
Technical Director 9Manufacturing & Production Manager 8
Group Leader 7
Vice President of Engineering 4Buyer/Purchasing 3
Chief Engineer 3Sales/Marketing 2Section Head 2
Consultant 1Research Director 1Other 5
Respondent characteristics
Job TitleJob
Title
Company TypeCompany Type %
OEM or Systems Company 33
Original Design Manufacturer (ODM) 19
Design Consultant / Design Services Company
12
EMS Provider/Contract Manufacturer 8
Fabless IC Company 8
IC or Integrated Device Manufacturer 5
Semiconductor IP Company 3
Foundry 2
Other 10
Company SizeCompany Size
%United States 96Canada 4
Current Location
Current Location
%Less than $10 million 40$10 to $49.9 million 17
$50 to $99.9 million 8
$100 to $499.9 million 13$500 to $999.9 million 4
$1 to $2.9 billion 4
$3 to $4.9 billion 1$5 to $7.49 billion 3
$7.5 billion or more 6Don’t know 4
Median = $19.8 million
%
Americas 97
United States 93
Canada 9
Mexico 2
South America/Latin America (other than Mexico)
2
Europe 18
Western Europe (including UK) 15
Eastern Europe 5
Asia 18
China/Taiwan 11
India 7
Other than China/India 7
Internal Design Center
Location
Internal Design Center
Location
Proportion annual sales volume represents sales outside North America
Proportion annual sales volume represents sales outside North America
Proportion manufacturing done outside North America
Proportion manufacturing done outside North America
Median = $20 million
Median = $5 million
