DESIGN CAPABILITIES
These U.S.-based firms take
advantage of educated and skilled overseas workforces,
whether the engineers come from top-notch foreign universities or if they studied and worked in the U.S. before returning
to their home countries.
But not everyone in need of design services is willing to
trust their chip design to offshore companies, especially if they
don't work with leading-edge technology. A recent iSuppli
survey asked companies which aspects of their design they
would confidently offshore to emerging regions like India and
China (see the table).
While most were comfortable sending standard designs or
designs at older process nodes like quarter-micron, offshoring
65-nm designs was "a NO across the board," says Selburn.
Designs moving into newer process nodes like 65 and 45 nm
are typically done at home.
One design house in India actually offshored part of a
complicated design to the U.S., where more skilled engineers
could handle it, according to Selburn. Analysts agree that
Indian engineering is typically leading-edge, but most say
that China's engineering force isn't as experienced in the latest process nodes.
"Not to say that there isn't some level of state-of-the-art in
China," says Selburn, "but their design capabilities are usually two or three nodes behind the state-of-the-art."
Still, India and China remain top contenders for attracting
companies looking to offshore design centers, as well as for
emerging design companies opening up shop in those regions.
Much to the frustration of parent companies, engineers in
those countries are beginning to realize it.
Selburn says Indian engineers are discovering job-hopping,
leaving one employer for another across the street that pays
better. Eventually, that could mean offshoring design services
will cost more.
"It's going to narrow the gap," he said, "but right now it's
the Grand Canyon."
Design houses and service companies won't have to worry
about customers trying to find more thrifty design alternatives
anytime soon. As chips become more complex, companies
will rely on design services to get their projects completed on
time, replete with the latest technology. So, as the technological wherewithal rises to match that of U.S.-based firms, companies will likely look east with more frequency.