Engineer holding a semiconductor


Top Trends in Semiconductor Next-Gen Digital Engineering

Gilroy Mathew, VP, Global Head of Semicon Engineering, UST

Disaggregated chips and custom chipsets are among the advancements changing the semiconductor industry.

Gilroy Mathew, VP, Global Head of Semicon Engineering, UST

Gilroy Mathew, VP, Global Head of Semicon Engineering, UST

While the Great Resignation and Inflationary environment have put a damper on digital engineering overall, certain verticals have seen growth. The semiconductor industry, like the software and telecom verticals, has witnessed increased demand due to a surge in demand for chipsets.

Semiconductor Engineering cuts across multiple verticals. Silicon design is gaining traction due to the importance of processing speed, power efficiency, and custom chip requirements across industries.

It exists in the hi-tech led space alongside software and Internet, consumer electronics, telecom and storage and peripherals. This specific area was particularly immune to the COVID-19 impact on engineering spend. And we expect this category to have a higher-growth trajectory due to the high demand for chipsets across verticals.

More companies in traditional industries are referring to themselves as technology companies, looking to compete on the basis of their digital capabilities. As such, the need for chips and demands for what those chips can do will only increase.

Supply chain woes

Supply chain issues have created semiconductor shortages, which affected all types of electronics and connected device reliability. But it was not enough to derail the sector growth, with Gartner reporting that annual semiconductor revenue exceeded $500 billion for the first time in history.

Why semiconductors are so important

Corporate America’s interest in digital transformation has increased the importance of building newer and more powerful semiconductors. And the mobile revolution requires those chips to become smaller while retaining the same amount of power.

The move towards remote and hybrid work adds an additional wrinkle, requiring more processing power to enable employees and customers throughout the world to stay connected.

That’s why investing in semiconductor research and development is so important, companies will continue to prioritize purchasing the latest chips that can keep up with crucial applications like video conferencing, gaming, remote work, and other high bandwidth activities.

Investing in semiconductor digital engineering can produce incredible dividends for companies, such as reduced development time, reduction in bugs, and higher computational power. While many companies will continue to buy directly from traditional semiconductor manufacturers, others are taking matters into their own hands and building their own.

Challenges of next-gen semiconductor development

While companies have prioritized agility in many facets of their business, including software development, it is often the incorrect approach for semiconductors, given the specificity required of the hardware.

With the increasing integration of software (firmware) and chips, companies need a new approach to match the speed of software with the specifications of hardware development. Options include decoupling firmware from hardware development or creating different agile approaches to both, with hardware development using Commitment-Based Project Management (CBPM), which concerns itself with a final deliverable (versus iterative ones) and aligns the tasks required to meet that deliverable.

Integration also presents an issue as IP is increasingly delivered through silicon chips. By approaching IP integration from both top-down and bottom-up, companies create the right environment to maximize the efficiency of building next-generation chips.

Considering semiconductor digital engineering is such an important market, there are several trends that are leading to innovations and new players entering the marketplace. Here are three trends worth watching.

Disaggregated Chips

Disaggregated chip design is a big new trend responding to an ever-growing need for high-speed interfaces and the proliferation of interconnected devices. Tech giants like Facebook and Amazon are in the process of creating their own architectures. It is driving the differentiation across fabless players to third-party Silicon IPs to deliver new products faster and cheaper. Chips that use quality third-party IPs verified at IP/chiplet level can provide a faster go-to-market strategy. Disaggregated chip design solves several issues at once: addressing demanding server workloads, rising costs of silicon development, and the benefits of chiplets over monolithic chips.


Packaging Innovation

Moore's Law, which states that chip densities double every two years, is converging to 4mm, 3mm and 2mm nodes, which makes manufacturing the die a very expensive proposition. While chips densities are not exactly doubling every two years anymore, they’re still increasing, creating new challenges for semiconductor manufacturers, who are addressing the issue by investing in Chiplets, e.g., breaking the die into smaller pieces. Doing so creates several efficiencies as demonstrated below.


Custom Chipsets for other Verticals

Enterprises are investing heavily to deliver connected and autonomous functionalities without compromising performance. They are trying to achieve this by creating custom chipsets on their own which can deliver better outcomes. Apple famously created the M1 chip for its 2021 edition of computer, ditching Intel-manufactured chips for its own based on design based on ARM architecture.

This trend will only increase in the future as supply chain issues delayed chip manufacturing and delivery, significantly impacting the bottom lines of product manufacturers dependent on them. More and more companies will look to build their own chips as a way to become more competitive and resilient, especially if the supply chain struggles again in the future.

Many automotive companies, specifically, are working towards building their own chipsets by 2025, according to Gartner. And chips will become increasingly important for car manufacturers, who continue to build more intelligent “smart cars” and electric vehicles. Supply chain disruptions decreased automotive industry revenues by $110 billion in 2021. They will be following the lead of Tesla, which has been building its own chips for some time.



Digital engineering will continue to remake the semiconductor vertical, which impacts so many industries, due to the importance of technology in business. The importance of increasing processing speed, power efficiency, and custom chip requirements means companies of all sizes are depending on the latest semiconductor technology to power their businesses. To learn more about how UST helps plot the right path toward digital engineering, download our whitepaper Next-Gen Engineering: Transformation Across Chip-to-Cloud.