Tuesday, August 5, 2014

The Four Seasons of Chip Design

Having been in the chip design services business for almost 20 years now, I have noticed a seasonal aspect to the business and tried to make sense of it as of course it is my job to try to manage the level of work to the greatest extent possible.  But there is no doubt that there are ups and downs in the level of business through the years that follow a roughly seasonal pattern.

The Spring Season starts around February and extends through June.  This has historically been the busiest timeframe for RFQ's and project starts.  I believe the underlying cause of this is that customers come back from the Christmas/New Year's holidays, take a few weeks to get started, and then embark on their grandiose plans for the year.  You would think this would start earlier in January; I guess it takes a while to get over the hangover from the previous year end.  It is quite easy to overload at this time and you have to be quite careful not to over-promise and under-deliver. 

The Summer Season starts in June and ends in August.  In this time you find all of your customers are either on vacation, getting ready to go on vacation, or just getting back from vacation.  As a service provider you better have some longer term projects sewn up in the Spring or this can be a very lonely time.  Just try to schedule a design review with a customer during the last week of July.

The Fall Season starts in August and ends in November.  This season provides a 'second wind' of activity.  I believe this is due to customers coming back from their summer vacation and suddenly realizing they have a ton of work to get done by the end of the year that they have totally neglected through the summer.  The key for the service provider to get back from vacation before the customers and be ready to rock.

Finally comes the Winter Season, December and January.  Like the summer, it will be quite difficult to find your customers available as they are either working their butts off to meet their own end of the year deadlines, or are out on holiday shutdown.  Hopefully you are also working your butt off to meet end of the year deadlines but God help you if you have completed your projects in the Fall and need to find new projects at this time of the year.  Better just relax and wait until the Spring.

The cure for the ups and downs of the seasons are 1) longer term projects that span significant timeframes, 2) multiple successive projects from priority customers and 3) internal IP development efforts scheduled for the slow times.  In the end it just takes some perspective on the nature of the business to get through the peaks and troughs successfully.

I wonder whether service providers in other fields see a similar pattern.  Let me know what you think.

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