Every year, the IEEE ISSCC (International Solid State Circuits Conference) presents the cutting edge of IC design. It covers all the relevant application areas. As expected, AI is driving not just the processor market itself but also the corresponding data center technologies. It is here where the growth of the models is now putting stress on the data communication: >30% of the time is spend on moving data instead of computation. This bottleneck is becoming more severe. This is the reason to aggressively drive the application of optical communication to replace the copper wiring. Not only for communicating to rack but also from board to board. The latest developments now also focus on on-board large radix optical switches. With this increased focus on photonics-based solutions, related fields such as EDA also need to make further steps, specifically in the co-simulation of electrical and photonic sub-systems.
One of the challenges that comes with design services is the cyclical nature of the services business. When the economy tightens and corporates are watching their operational expenses, the first step will be to halt any external contracts/contractors which are not deemed absolutely essential.
Whereas the earlier (staircase) model is a good approach in scaling up revenue and creating new revenue streams, the foundation of the company is still based on the service model: headcount continues to be the main driver (typically up to 60-70% of revenue). In terms of (enterprise) valuation the additional revenue streams, however, will already make a significant difference.
Design services companies typically start small (some exceptions when it concerns management buy-outs) and natural growth is a slow process as it requires hiring and training of engineers based on/driven by the revenue stream of the company. Growth of business is tied to growing the team and it is not always easy to find the engineers.