OEM Custom Silicon Solutions BOM Cost Reduction

June 23, 2014, anysilicon

This is a guest post by Donnacha O’Riordan, Director of Services Strategy at S3 Group

As process technology nodes advance, falling costs & increasing capacity on older nodes enable OEMs embark on custom ASIC developments to take advantage of higher levels of integration thereby realizing significant BOM savings. Never before have mixed signal ASIC developments been within reach of so many, lower volume applications.

Choosing the right partner to realize the silicon development, in a cost effective and low risk manner, is still a challenge to be overcome by OEMs.
It is not only a technical challenge however, but also one of maximizing ROI. There are a number of system architecture choices to be made when moving from a discrete and ASSP based product to a custom SoC from CPU & memory architecture choice and software implications, to discrete RF, System in Package (SiP) to RF SoC, each with their own advantages technically and in terms of ROI.

This article discusses some of the challenges and opportunities addressed by S3 Group for our OEM Customers:

  • Allow Product & Systems designers to reap the benefits of lower manufacturing costs on older process geometries
  • Maximize feature benefits, by working with a partner with a strong understanding of all the system components and of the various technology options for implementation
  • Developments are predicated on a strong and demonstrable business case
  • S3 Group provides a one-stop shop to move from PowerPoint to packaged tested parts and into production

Motivation for higher integration

The motivation for OEMs to look at a custom SoC solution can come from a number of sources, from manufacturing led “Product Cost Reduction” initiatives to R&D led “Product Innovation” initiatives.
Regardless of the motivation, the perception remains that this is a high investment, high risk approach and, while that is true at the advanced node end of the spectrum, it is not always the case when older mature process geometries are considered.

Maximizing product capability while minimizing development cost can be achieved by targeting mature process nodes, in a balance of performance and NRE.

A custom SoC development enables further value additions, such as new functionality, higher performance, lower power, simpler board level environment all of which become a competitive differentiation. CMOS process options and IP availability enable almost complete Mixed Signal functionality, and increasing RF functionality integration.

BOM Reduction

Demonstrating a clear business case and ROI is one of the first steps. In typical cases one should expect a payback period between 18 and 24 months, where the initial NRE investment in design and manufacture, is recovered through the savings realized in BOM costs. Savings then continue to accumulate over the lifetime of the product.

The advantages of a custom mixed signal SoC development go beyond just removing the cost of the parts that are integrated however. Since the system will have a significantly reduced number of parts, it leads to simpler, cheaper PCB design and smaller form factor for end product. This can have the effect of opening up new markets for the application that were previously unavailable due to the previous price point and form factor of the end product.

s3-cost reduction

New Product Development

Competitive differentiation may be enabled through additional or higher performance functionality implemented in a SoC that may not be available to competitors using standard parts.
Increasingly security and protection of IP is a concern, which is where a branded custom SoC offers compelling advantages due to the increased difficulty associated with reverse engineering a SoC.
Working jointly, system architects from S3 Group and Product / R&D engineers from our OEM customers, identify the components suitable for integration. These choices are driven by IP availability & suitability to the application in addition to licensing costs. S3 Group brings mixed signal and RF IP and SoC design experience to the equation to ensure that the best informed choices are made.

Platform development

A Platform development addresses multiple product lines with a single SoC (platform) design by enabling the use of different design and manufacturing configurations such as packaging/bond-out options or memory configurations, for example – decisions which can be evaluated jointly with our customers. In this manner a single NRE investment is made to develop a custom SoC which will service multiple product line requirements.


A custom SoC development is now realizable for applications and products, which previously could not justify the NRE investment. A high performance, mixed signal SoC development however is not a trivial development and working with an experienced and proven partner such as S3 Group significantly reduces development risk.

Tighter supply chain integration and reduced BOM part numbers all simplify OEM operations, reduce dependence on distributors and remove dependencies on older parts that may become obsolete.
Most importantly, savings realized from a BOM cost reduction, go straight to the bottom line profitability of the product, and consequently our partners.


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