Cost Modeling as a Decision Making Tool

The use of simulation is well established in the semiconductor industry. Virtually all circuit designs are run through a Spice simulation, layouts are analyzed for timing issues and even process development employs process simulation tools. What I believe is less widely used but just as useful is cost modeling.

The semiconductor industry has been driven by Moore’s Law for the last fifty years. Moore’s Law is not just about increasing chip density but also about lowering costs. Cost modeling can be a very useful tool in the process development, design and procurement phases of a chips lifetime allowing various alternatives to be evaluated for cost impact and even in supplier negotiations.

The first project I did after founding IC Knowledge was to evaluate potential cost savings for a customer if they did a shrink of an ASIC they were having made. The ASIC was originally expected to be a low volume runner but was now running in the millions of pieces per year. The first cost model I ran for the customer was a baseline of their current design and process. I immediately discovered that the customer was paying a greater than 70% margin for the ASIC. Armed with that knowledge the customer negotiated a reduction in the ASIC price of over a dollar a unit saving millions of dollars per year. Further modeling also revealed the opportunity to cost reduce the part by redesigning it into a smaller node. Since our modeling produced revised wafer cost estimates as well as mask set costs, the payback for the redesign could be easily calculated.

Cost modeling is only a useful tool if the results are accurate. Our models are highly complex bottoms up simulators. My company IC Knowledge LLC introduced our IC Cost and Price Model in 2000 and has now been selling it commercially for fifteen years. In that time the model has become the industry standard for cost modeling of low power silicon ICs such as ASICs, SOCs, microprocessors, microcontrollers, DRAM, Flash and many other chip types. We have built up an extensive customer and partner network that provides a steady stream of feedback that insures and refines the accuracy of our models. We have also introduced models for high power silicon integrated circuits and discrete devices, MEMS products and our newest product our Strategic Model that projects out to the 5nm node with detailed equipment and materials requirements, and wafer and process step costs.

Our modeling is routinely used for negotiations around wafer or finished product pricing, for benchmarking, outside analysis, technology selection and many other purposes. Our IC Cost and Price Model covers all of the major foundry processes and produces manufacturing wafer cost and selling price estimates by supplier, node, year and quarter, and volume. The estimates can be run out to 2020 to anticipate costs over the lifetime of a part. Our new strategic model has been very successful with materials and equipment companies and also offers the ability to cost out new processes during development.

With our new Strategic Cost Model a process integration engineer developing a new process could evaluate alternate process flows and evaluate the cost impact of specific process design decisions. Our easy to use IC Cost and Price Model allows designers to evaluate the cost of different process nodes and suppliers as well as various process adders. Our Discrete and Power Products Cost and Price model is particularly popular with the automotive industry and our MEMS Cost and Price Model can model complete MEMS products with up to 2 MEMS die and up to 2 IC die per part. All of these models come standard with 12 months of updates and support.

With the economics of semiconductor production under so much pressure at the leading edge nodes the use of cost modeling to optimize processes, designs and procurement is an essential tool for the semiconductor industry. IC Knowledge LLC is the world leader in this space with a broad line of standard off the shelf model available as well as custom project cost consulting.