Decide to Build or Buy Design Blocks in Chip Development
Chip development teams face a critical decision: should they build design blocks in-house or purchase them from third-party vendors? This choice directly impacts development timelines, costs, and competitive advantage. Industry experts weigh in on when to invest engineering resources in custom development versus leveraging proven commercial solutions.
Build Only What Differentiates
When deciding whether to build a design block or license one, the key factor is if the block is providing real market differentiation or just a functional requirement needed for the overall system to function properly. If the block is a standard interface or commodity component, the team should always license the block. Engineering teams often drastically underestimate the total cost of ownership for building versus licensing and usually think they are creating a cost-effective solution. However, the long-term burden of maintaining, tracking down bugs and updating the compliance for the IP functions is a significant hidden tax on the engineering velocity of their program.
I have seen many engineering programs stall by teams believing that by building their own standard controller blocks, they would gain more control over them. For example, a team building a proprietary memory interface found that they had spent almost 40% of their engineering bandwidth on verification and fixing edge cases (interoperability issues) with external devices. By switching from building a proprietary solution to licensing a mature solution, they were able to redirect their core team to work on the true differentiating features of their product and help them get to the market nearly six months sooner than originally planned. In practical terms, you should almost exclusively develop and build the Intellectual Property (IP) that makes your product unique, and license everything else so that you can focus your engineers on creating the largest possible competitive advantage.
Protect Tape-Out Schedule Above All
Schedule risk against a fixed tape-out often outweighs any savings. Silicon-proven IP with strong support can cut unknowns in integration and testing. Internal builds can protect performance goals but add learning curves, tool setup, and test bench work that burn time. Clear deliverables, solid support agreements, and reference designs reduce delays when blocks misbehave.
Buffers for lab bring-up and yield learning should be planned, not wished away. Quantify critical path tasks, score the risks, and pick the option that protects the tape-out date. Act now to secure the path with the lowest time risk.
Preserve Portability Gain Vendor Leverage
Strong flexibility protects future plans from one vendor’s limits. License terms that bind nodes, foundries, or product lines can trap a program later. Encrypted models and black boxes can block debug, reuse, and tuning for speed or power. Interface choices and small design hooks should allow swap-in of other options when needs change.
Open standards and code escrow can add leverage during renewals and moves. Plan for a second source or a credible build path to keep choices open. Negotiate exit rights and design for easy replacement now.
Model Total Cost Over Program Life
Headline price can distract from the real cost that lasts for years. Total cost covers engineering time, tools, integration, testing, bring-up, and support. Bought IP also brings royalties, support fees, and possible area or power overhead that raises wafer cost. In-house blocks can win when reused across several chips, but they can lose when the team is small or timelines are tight.
Risk of re-spins, lab debug, and field issues should be priced as probabilities, not hopes. Build a multi-year total cost model with best, base, and worst cases. Make the choice only after that model is complete.
Prioritize Compliance Proof With Certification Evidence
Standards and safety programs demand proof, not promises. Evidence like test reports, coverage numbers, trace links, safety manuals, and safety analysis reports saves months when auditors arrive. Mature third-party IP may ship with proof packs and lab reports that speed market entry. Homegrown blocks can meet standards but need a full plan for tests, documents, and tool checks.
Results from industry events or silicon trials should be checked, not assumed. Ask vendors for proof now and fit audits into the schedule. Choose the route that delivers complete evidence on time.
Keep Trust Foundations Under Direct Control
Some blocks form the trust base of the chip and must be controlled end to end. Outsourced designs can add exposure to hidden bugs, supply chain risks, or opaque fixes. Source access, design reviews, and on-site checks raise confidence but also add cost and time. Legal terms on data handling, country of origin, and key material must match policy and law.
A clear proof of origin also helps with customer checks and future approvals. Write down the threat model and the control points that must stay inside the company. Choose the path that meets those controls without compromise.