Design win

Notes

The long lag and long tail make automotive design win announcements a leading indicator of revenue several years out.

Overview

A design win is the point at which a customer selects a supplier's chip for a product it intends to build in volume, so that the part becomes part of that product's production design. It is the main forward-looking measure of success for semiconductor sales and applications teams, because revenue arrives only later, when the customer's product ships. In automotive markets the wait is long, but a win can then bring revenue for many years.

How it works

A win usually ends a competitive selection. The customer sets requirements, evaluates candidate parts with samples and evaluation boards, builds prototypes and then chooses one supplier, or sometimes more than one, for that position in the design. Magnachip describes design wins as competitive selection processes and says its sales cycle begins with a development and test period of three to twelve months, followed by a customer qualification period of another three to twelve months, before volume production.

Suppliers track wins in a pipeline, often with an estimate of lifetime revenue. A win is not a purchase order: the customer's product may be delayed, sell less than planned or be cancelled. Magnachip warns that it may spend heavily during the selection and never realise meaningful sales, and indie Semiconductor, which reports a strategic backlog of revenue it expects over the next ten years, cautions that the design wins behind it may not generate the predicted revenue.

Once designed in, a part is hard to displace, because qualifying a new supplier costs the customer time and money. Magnachip notes that a customer is likely to keep using the same chip, and indie says it can stay in production with a customer for seven years or longer on a single design. Distributors take part too: some suppliers run design registration programmes that reward a distributor for a win it found, as EE Times reported when Microsemi launched one in 2002.

Examples

• An automotive tier 1 supplier selecting a radar chip for a driver assistance module that will reach production vehicles only later.
• A smartphone maker choosing one power management chip for a new model after comparing samples from several suppliers.
• An ODM choosing a GPU platform for an AI server, a step Nvidia's 2017 ODM partner programme aimed to bring closer to production deployment.
• A distributor registering a design it found at a customer so that it earns the agreed margin when production orders follow.

Why it matters

Related terms

• SOP
• CPV
• Tier 2
• Design-in
• Socket
• Sell-in

Where it appears on the Hub

Used on 19 pages of the Hub. In each group, the pages that mention it most come first.