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Getting a Quote Without Talking to a Salesman

Getting a Quote Without Talking to a Salesman
by Paul McLellan on 11-09-2014 at 4:00 pm

 VLSI Technology, for those of you not of a certain age, was one of the companies that, along with LSI Logic, created the ASIC business. One challenge in ASIC is that the customer needs to decide which ASIC company to use (since the libraries and technologies are all different) meaning they needed to get quotes from several companies. The procedure was tortuous. The customer would contact a VLSI salesperson who would collect the relevant data about the design. This would then be passed to the design center (later technology center) that was going to support the design who would estimate the cost of the design in manufacturing (and any services that were to be provided). The design center manager, who was essentially local marketing, would manually work out the die size and then use our cost model (hopelessly bad in the early days) to work out the cost. Margined up he (I don’t think we had any female design center managers) would then tell the salesperson the price. There would sometimes be a negotiation, often along the lines of Japanese semiconductor company X quoted half as much, to which we would point out that they didn’t actually have the capability to do a design that complex (usually true). LSI Logic would usually quote around the same price as we did. If the customer was sensible they would pick LSI if they decided to do a gate-array and VLSI if they decided to do a cell-based design. If they picked Japanese semiconductor X they would usually be back 6 months later when everything had gone pear-shaped (where does that phrase come from?).

The whole process might take weeks. By the way, the salesperson was never told the estimated cost, just the price, so that they didn’t assume that they had more flexibility in negotiation than their instructions. As an aside that is one reason that software negotiations are so different from hardware, the salesperson knows that the actual marginal cost is basically zero. And so does the customer.

Given that the process took weeks, it was really hard to handle the customer who came back and said “the price is too high”, what if I halve the size of the RAM and put it in a cheaper package. More weeks.

Until comparatively recently, getting a quote from anyone was basically the same process. Yes, the cost models had improved. Yes, spreadsheets had become ubiquitous. But it was basically the same: tell us about the design, here’s a price. And it still took weeks.

At its peak, VLSI Technology roughly brought 200 designs into production a year, which probably means 250 design starts (including ones that got canceled) meaning maybe 700 quotes since customers would typically get 2-3 quotes before picking a supplier. That is a lot of work, much of it busy work. The designs we won obviously also had to cover all the costs of quoting the designs we lost.

eSilicon is a fabless ASIC company. Well, and more. It does designs starting from all sorts of points depending on what the customer wants, and then delivers (usually) packaged parts to a price. Sometimes the customer does all the design and just uses eSilicon for manufacturing. Sometimes they use eSilicon IP. Sometimes eSilicon provides some level of design services. And sometimes, companies just get eSilicon to manage their production operations.

Internally, they realized that the manual process of estimating what they should quote the customer was too slow (still measured in weeks) and so they automated the process. They created a system that their experts could use to turn a quote in a day. Not only that, it meant that the internal cost of a quote to eSilicon was pretty low.

But eSilicon realized they could go one step further. Why involve their own experts at all? If they put the quote system on their website then customers could do all the work (self-service gas stations or ATMs anyone?) and get their own quotes. Not only that, since iteration was so much easier, customers could home in on the sweet-spot of their functionality/price point. They started just with MPW shuttles but then they extended it to full volume production (at this point just with TSMC). That’s right, you can go online and get a quote from eSilicon for your design in TSMC production untouched by human hand. And iterate that quote a dozen times for different configurations, packages, volumes and so on. Its online, nobody is going to complain about how much quote busy work you are creating any more than the gas station will complain if you only put in 1 gallon each day.

I’ve actually used their quote system for my (hypothetical, obviously) design. It works just like it says on the can. There is a design entry phase where you give all the parameters of the design. The actual quote takes less than a minute to generate. And it is probably worth emphasizing that it is a quote. A real binding quote. If you sign it, then eSilicon will honor the price.

See eSilicon and the 10 minute quote

If you want to know more, there is a webinar next Wednesday at 9am Pacific. Mike Gianfagna is moderating a panel so I can’t claim there is absolutely no marketing but it is mostly about people’s experience at using the quote system. The panelists are:

  • Bil Brennan from Credo Semiconductor
  • Trevor Hyatt from IDT
  • Mahesh Tirupattur from Analog Bits

For more details and to register for the webinar go here.

More articles by Paul McLellan…

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