(p. B1) OAKLAND, Calif. — A global shortage of semiconductors has cast a cloud over the plans of carmakers and other companies. But there’s a silver lining for Silicon Valley executives like Aart de Geus.
He is chairman and co-chief executive of Synopsys, the biggest supplier of software that engineers use to design chips. That position gives Mr. de Geus an intimate perspective on a 60-year-old industry that until recently was showing its age.
Everyone now seems to want his opinion, as shown by the dozens of emails, calls and comments he received after addressing a recent online gathering for customers. Synopsys says people tuned in from 408 companies — more than double the number for an in-person event last held in 2019 — and many weren’t conventional chip makers.
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(p. B3) Their overriding question: How do you develop chips more quickly?
Even as a chip shortage is causing trouble for all sorts of industries, the semiconductor field is entering a surprising new era of creativity, from industry giants to innovative start-ups seeing a spike in funding from venture capitalists that traditionally avoided chip makers.
Taiwan Semiconductor Manufacturing Company and Samsung Electronics, for example, have managed the increasingly difficult feat of packing more transistors on each slice of silicon. IBM on Thursday announced another leap in miniaturization, a sign of continued U.S. prowess in the technology race.
Perhaps most striking, what was a trickle of new chip companies is now approaching a flood. Equity investors for years viewed semiconductor companies as too costly to set up, but in 2020 plowed more than $12 billion into 407 chip-related companies, according to CB Insights.
Though a tiny fraction of all venture capital investments, that was more than double what the industry received in 2019 and eight times the total for 2016. Synopsys is tracking more than 200 start-ups designing chips for artificial intelligence, the ultrahot technology powering everything from smart speakers to self-driving cars.
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The industry has historically been notorious for booms and busts, usually driven by purchasing swings for particular products like PCs and smartphones. Global chip revenue slumped 12 percent in 2019 before bouncing back with 10 percent growth last year, according to estimates from Gartner, a research firm.
But there is widening optimism that the cycles should moderate because chips are now used in so many things. Philip Gallagher, chief executive of the big electronics distributor Avnet, cited examples like sensors to track dairy cows, the flow of beer taps and utility pipes, and the temperature of produce. And the number of chips in mainstay products like cars and smartphones keeps rising, he and other executives say.
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Chip design software gained popularity in the 1980s to streamline tasks that engineers once carried out with pencils and drafting tables, painstakingly drawing clusters of transistors and other components on chips.
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Mr. de Geus said new growth was coming from what seemed like a problem: a slowdown in Moore’s Law, industry shorthand for the perennial race to shrink chip circuitry so chips do more with less silicon. In response, he said, some companies are using Synopsys tools to design entire systems and bundles of smaller chips that work like a single processor.
During his recent speech to users, Mr. de Geus demonstrated how artificial-intelligence enhancements could allow Synopsys tools to automatically decide how best to situate and connect blocks of circuitry on a chip. A system managed by a single engineer did the work two to five times faster than a team of designers, Mr. de Geus said, while its design used up to 13 percent less energy.
(Note: the online version of the story has the date May 7, 2020, and has the title “Despite Chip Shortage, Chip Innovation Is Booming.”)
