Chapter 5

Feasibility study

A product development should always start with a feasibility study. A product is feasible if:

  • The specification does not violate the laws of physics!
  • The specification is achievable with available technologies and tools.
  • The specification is achievable with available skills and resources.
  • The target price is compatible with production costs.
  • The return in invest occurs in a reasonable time frame.

5.1 Laws of physics

This is so obvious that it is important to keep it in mind! One often forgets obvious things. However, most requirements comply with the laws of physics, fortunately.

Some “laws” are sometimes considered as fundamental while they are not, being only a limited collection of experimental data or extrapolated trends. These “laws” can be overcome while the laws of physics can't.

5.2 Technologies and tools

Not only must the specification be achievable in absolute, but also it must be achievable with what is available... If a process exists to do the job but if this process is not available to you, the product is not achievable. If special tooling is required, either for designing or for manufacturing the product and if either one is not available nor affordable, the product can't be done. In particular,questions to address are:

  • Absolute maximum ratings. Temperature range and operating voltages must be within the technology capabilities.
  • Board soldering technology. Parts must not be stressed over their capabilities during board soldering.
  • Package on board thermal capability. The dissipated power must not drive the junction temperature above maximum allowed value.
  • Design tools.
  • Manufacturing tools.

5.3 Skills and resources

When the product is feasible in absolute and the process and tools are available, the required skills must be available and the available resources such as design manpower and production capacity must be sufficient to reach timescale requirements and production rate. Questions to answer:

  • Are the product function and performance within the design team domain of experience?
  • If outside the domain, how far?
  • Is the workload divided by the design team size compatible with the target timescale?

5.4 Costs

This is probably the most important issue: A product can be done if it makes money. But this is addressed at the end since it depends on all the other items even though, practically cost aspects must be kept in mind permanently during the feasibility study (and during the entire product life!). Integrated circuits costs divide mainly in two parts:

  • NRE costs. Expenses like design manpower and mask tooling are done once in the product life.
  • Production costs. Every part costs money to produce.

5.4.1 NRE costs

Manpower costs must be evaluated. Apart from salaries, additional costs such as fixed costs and software licenses must be taken into account. These can more than double the cost of manpower.

Mask costs strongly depend on process generation. Mature processes masks are not so expensive while the latest processes have huge mask costs.

5.4.2 Production costs

Production costs divide in three parts:

  • Silicon
  • Package
  • Test

5.4.2.1 Silicon cost

Silicon cost is more or less proportional to IC die size. In fact, cost increases a bit quicker than die size because of the yield impact. For a given defects rate, the larger the chip, the more likely a defect to occur. The cost per mm2 depends on the process.

Factors impacting the cost are:

  • Lithography feature. The finer the devices the more sophisticated the equipment and the environment, so the higher the cost par wafer.
  • Number of masks. This defines roughly the number of elementary process steps. The higher this number, the higher the cost.
  • Wafer size. The larger the wafer, the more circuits manufactured at a time, so the lower the cost. But larger wafers require larger, so more expensive processing machines, longer time spent on the steppers to expose the entire wafer area and these effects limit the benefit of larger wafers.
  • Process maturity. After the introduction phase of a new process, continuous improvement takes place, yield improves, the initial cost of equipment is amortized and finally cost reaches its final floor value.

5.4.2.2 Package cost

Package cost depends on:

  • Package technology. Technology defines materials and process steps. Both impact cost.
  • Package size. This defines the cost of materials for a given technology.
  • Number of pins. This defines the time spent in bonding the wires and to some extend the cost of wire.

5.4.2.3 Test cost

Test cost depends on:

  • Type of tester. Number of pins, performance, analog and digital capabilities impact tester hourly cost.
  • Test time. Obviously, the longer the test, the more expensive.

5.4.3 Total cost

There are mainly two models for calculating the product cost. Either the NRE costs are covered separately, either they are distributed over production. The first approach is standard for low volumes, the second for high volumes. Sometimes, an hybrid approach is used. Part of the NRE costs is covered separately, part is distributed over production.

5.4.4 Product sales price

Product sales price is calculated taking into account production costs and target margin. As already stated, sales price suffers from a significant reduction pressure in the 5 to 15 % per year depending on volumes.

5.5 Results

At the end of the feasibility study, four items must be available:

  • The product feasibility and associated development risks.
  • The product NRE and production costs including a risk factor.
  • The product planning with two options: The best, optimistic scenario and a more conservative, realistic one.
  • An estimation on the ROI date and the capital interest over time in the various volume production scenarios.

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