Business Model
Erckert engineering offers all kinds of services arround the integrated circuit (IC). There are two basic business models we ar using:
1. Fixed price
2. Time and material
It depends on the character of the project which kind of model is appropriate. Very often it even makes sense to create a combination of both models.
Fixed Price
Fixed Prices work well if the effort of a project can be estimated in a very accurat and detailed way. To obtain a reasonable estimation the following conditions must be satisfied:
- The specification is stable and complete
- CAD environment is tested and sufficiently powerfull
- A mature manufacturing process is used
Even if these conditions are found every change of the anticipated condition (for instance specification changes, design rule changes ...) must be documented. In case such a change leads to a considerable additional effort both partners either have to agree on a modification of the contract or take back the change of the condition.
Due to the effort of documentation and creation of complex contracts fixed price often is more expensive than doing the same job with a time and material model.
Fixed Price in Stages
We experienced it to be more reasonable to divide a big project into smaller subprojects. The subprojects are using fixed price models. The price of the next step (subproject) is defined using the result of the previous step.
Let me give you an example of designing a whole chip:
Feasability Study
The feasability studie figures out if a certain design target can be reached and which technologi can be used. The result of a feasability stuy usually consists of:
- A target specification
- The technology choice
- Estimation of the effort of the circuit design
The estimation of the effort of the circuit design can be used to define the price of th circuit design phase.
Circuit Design
Here the circuit of the chip will be developed. The result of the circuit design phase typically is:
- The circuit of the IC
- Simulation results
- Possibly a tentative layout of parets of the most critical blocks
- Development report
- Estimation of the layout effort
- Estimation of the bench test effort
The estimation of the layout effort can be used to define the price of the layout phase. Similarly the price of the evaluation phase can be defined using the effort estimation for the bench evaluation.
Layout
Layout is the physical implementation of the circuit. This phase is extremely sensitive to any weaknesses of the CAD environment. Therefore a high effort must be spent for documentation that later can be used to improove CAD tools and to keep cost under control.
The result of the layout phase typically is:
- The layout
- Documentation of possible tool improvements
- Verification of the layout versus schematic (LVS)
- Design rule check (DRC)
- Documentation of dummy errors
- Assembly documentation
Bench Evaluation
During bench evaluation first samples are operated at conditions close to the application. Besides that characteristics required fot correlation with production tests are measured. The result typically is:
- An evaluation report
- Optionally a bug report
The bug report can be used to estimate the effort of a possible redesign.
Time and Material
Here both partners agree on an hourly rate plus (if applicable) a rate for the equipment provided by Erckert engineering (We can offer support using test equipment of Erckert engineering). This business model is very flexibl because unexpected changes of the project plan do not require renegociation of the contract. Typical projects that are easier to handle using a time and material approach are:
- Application support
- Concurrent engineering (for instance specification is not stable but design already has begun)
- Use of new, untested design flows
- Use of technologies with low maturity
- Taking over already running projects with difficult to estimate status
- Being thrown into a project as an additional resource to do whatever is needed
Current standard hourly rates
Hourly rates depend on contract duration. Erckert engineering distinuishes between short term contarcts (less than 500h) and long term contarcts (more than 500h). In addition it makes a difference if the work can be carried out from the home office of Erckert engineering (remote) or if it is required to work at the customer's site (on site).
Short Term hourly rates:
Short term (less than 500h) on site: 152.- Euro/h
Short term (less than 500h) remote: 130.- Euro/h
Long Term hourly rates:
Long term (more than 500h) on site: 120.- Euro/h
Long term (more than 500h) remote: 103.- Euro/h
(last update: July 19 2022)