Tony Funderburk is Director of Global Electronics & High Tech PLM Sales at PTC, where provides guidance and support for companies looking to accelerate innovation, manage product complexity, and drive digital transformation through Product Lifecycle Management (PLM) solutions. With more than 25 years of experience in enterprise software sales and leadership, Tony brings deep expertise across the electronics and semiconductor industries, working closely with organizations to improve product development, strengthen collaboration, and build more resilient operations.
The semiconductor industry's biggest challenge isn't a lack of innovation—it's managing the growing complexity surrounding it. As AI demand surges, chiplet architectures multiply, and global supply chains fragment; semiconductor organizations increasingly struggle with lifecycle coordination and engineering continuity, not chip design itself.
Semiconductor leaders are racing toward a trillion-dollar opportunity—but the window to capture it is narrowing fast. Global semiconductor revenue is projected to reach $975 billion in 2026, driven largely by generative AI and high-performance computing. AI accelerators are expected to account for 50% of that total. As demand surges, product lifecycles are compressing, and competitive advantages can disappear within a single product generation.
Yet despite unprecedented R&D investment, many organizations still struggle to bring products to market faster.
How has semiconductor complexity changed over the last decade?
Historically, semiconductor innovation was defined by engineering challenges: increasing transistor density, shrinking process nodes, and managing more complex design verification. For decades, industry roadmaps such as Moore’s Law and the International Technology Roadmap organized progress around scaling and node advancement.
While significant, these challenges were primarily seen as engineering and technology scaling problems solved through advances in device architecture, process technology, EDA, verification, and manufacturing capability.
Today, complexity extends across the entire product lifecycle—and the product itself has fundamentally changed. A modern semiconductor product is no longer just silicon. It includes firmware, software stacks, development kits, evaluation boards, compliance documentation, and regulatory evidence. Hardware and software must be co-designed, co-validated, and co-released.
Add to this, the shift toward chiplets, 2.5D/3D ICs, and heterogeneous integration, and the design boundary has blurred significantly. Performance leadership is no longer defined by node shrink alone. Package complexity has become a competitive differentiator—which means collaboration requirements have expanded far beyond internal engineering teams to encompass foundries, OSATs, substrate suppliers, and software partners.
Why is fragmented product data a risk not just an inefficiency?
Many semiconductor organizations continue to manage product information across disconnected systems. A recent PTC survey found 93% had product data silos, with more than half reporting most data was siloed within a specific systems and only certain subsets had organization-wide access.
This fragmentation produces consequences that go well beyond operational inconvenience:
- Slower NPI execution as teams wait on incomplete or conflicting information
- Late-stage engineering change orders (ECOs) that cascade across multiple variants and manufacturing partners
- Poor visibility into downstream impact when a requirement or specification changes
- Increased rework driven by handoffs that lack traceability or context
- Difficulty assessing change impact across cross-functional and cross-organizational boundaries
The cost of disconnected engineering is rising faster than the cost of innovation itself.
These individual delays add up to a larger business problem. Learn more about the hidden cost of disconnected engineering in semiconductor organizations, including how gaps between PLM, MES, ERP, and quality systems create late-stage surprises.
What does it mean to lose engineering continuity and why does it matter?
Engineering continuity is the ability to maintain clear, traceable connections between requirements, product definitions, design activities, manufacturing execution, quality processes, and supplier collaboration throughout the entire product lifecycle.
Consider this scenario. A customer requirement changes late in the development cycle. Immediately, several questions arise:
- Which products and package variants are affected?
- What test procedures must be updated?
- Which manufacturing partners need notification?
- What software dependencies exist?
When product information is fragmented across spreadsheets, shared drives, homegrown databases, and email threads, answering these questions takes days—sometimes weeks. In this space, by then, market windows may have narrowed or missed entirely.
Modern semiconductor companies don't simply need faster engineering. They need connected engineering—a continuous digital thread from requirements through silicon to scale.
What forces will make semiconductor complexity worse in the next five years?
Rather than stabilizing, the forces driving complexity are intensifying. Four trends stand out:
Advanced packaging: The chiplet market was valued at $5.3 billion in 2024 and is projected to reach $42.8 billion by 2029 (41.9% CAGR). Technologies like 2.5D/3D stacking, fan-out wafer-level packaging, and hybrid bonding are transforming the package from a commodity enclosure into a product differentiator—one that requires sophisticated cross-discipline collaboration.
As the package becomes part of the product architecture, traditional lifecycle practices may no longer be enough. Explore why advanced packaging demands a new lifecycle strategy.
AI product development: AI-driven products introduce additional requirements around software validation, memory architectures, and ecosystem coordination. They demand lifecycle management that spans both hardware and software simultaneously—a challenge most existing tool chains were not designed to handle.
AI also creates a second challenge: whether semiconductor organizations have sufficiently connected, governed product data to use it effectively. Learn how to build an AI-ready semiconductor organization.
Supply chain diversification: Geopolitical pressures, the U.S. CHIPS Act ($52.7 billion), and regional manufacturing expansion are increasing the number of stakeholders involved in product development. Managing controlled change visibility across internal fabs, external foundries, and OSATs simultaneously is a problem that no homegrown system can sustainably address at scale.
Talent constraints: The semiconductor industry faces an ongoing shortage of engineers skilled in AI, quantum computing, and advanced lithography. Organizations cannot simply hire their way out of complexity. Productivity per engineer must improve—and that requires structured, governed engineering processes, not more headcount.
Semiconductor Industry Trends and the Future of Manufacturing
Explore the latest semiconductor industry trends, including emerging AI technologies, supply chain challenges, and innovative solutions.
Read the BlogThe path forward: Innovation needs continuity to scale
For years, semiconductor leaders have focused on accelerating innovation. The next competitive frontier is ensuring that innovation scales without creating additional complexity, execution risk, or organizational friction.
The companies that succeed won't simply design better chips. They'll build the engineering continuity needed to connect requirements, design, manufacturing, quality, and partner ecosystems into a cohesive lifecycle strategy. When that foundation is in place, complexity stops being a liability—and starts becoming a competitive advantage.
Next in this series: Next in the series: Complexity becomes costly when product information cannot move with the product. Explore the hidden cost of disconnected engineering in semiconductors and why engineering continuity depends on connected PLM, MES, ERP, and quality data.
Frequently asked questions
What is engineering continuity in semiconductor manufacturing?
Engineering continuity refers to maintaining traceable connections between requirements, product definitions, design activities, manufacturing execution, and quality processes across the entire product lifecycle. It ensures that when something changes—a requirement, a package variant, a supplier—every downstream team understands the impact immediately.
Why are semiconductor companies struggling with complexity today?
Complexity has expanded beyond chip design to encompass packaging, software co-development, multi-foundry manufacturing, OSAT coordination, and regulatory compliance. According to industry research, over 60% of semiconductor companies manage product data across six or more disconnected systems, which makes coordinating change across these layers extremely difficult.
How does advanced packaging increase lifecycle complexity?
Advanced packaging technologies—chiplets, 2.5D/3D ICs, fan-out wafer-level packaging—transform the package itself into a complex product requiring cross-discipline collaboration between electrical, mechanical, and thermal engineers, as well as external OSATs and substrate suppliers. The chiplet market is projected to reach $42.8 billion by 2029, signaling how central packaging has become to semiconductor competitiveness.
What role does talent shortage play in semiconductor complexity?
With a persistent shortage of engineers skilled in AI, quantum computing, and advanced lithography, organizations must improve productivity per engineer rather than simply scale headcount. Fragmented tools and disconnected workflows consume engineering time that should be directed toward innovation—making structured lifecycle management a productivity imperative.
How does supply chain diversification affect semiconductor product development?
As manufacturers expand across new geographies in response to geopolitical pressures and regional subsidy programs, the number of stakeholders involved in a single product's lifecycle grows significantly. Without controlled change, visibility and governed collaboration workflows, coordinating across foundries, OSATs, and component suppliers becomes a major source of delay and rework.
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