Design win

A design win means getting your chip chosen as the part inside another company's product, for the whole life of that product. The chip maker is awarded a place in a design, such as a phone, a car or a router, after the product maker has tested it and picked it over rival chips. After that, the product maker buys that chip in large numbers for years.

Here is how it works in general. A product maker plans a new product and invites chip makers to propose a part. The chip maker gives sample chips and design help, and the product maker builds a prototype around the chip and tests it. If the chip meets the needs for performance, price and supply, the product maker selects it and designs the rest of the product around it. Changing the chip later would mean redesigning and re-testing the product, so the chip stays until the product is replaced.

The win comes early. A chip is chosen two or three years before the product reaches shops, so chip makers count their design wins as a forecast of future sales. Big customers sometimes want two suppliers for the same part, so a win may be shared. After the win, the product maker gains from the chip maker's help, and the price falls as the volume grows. The chip maker spends money before earning anything, so a lost design means that money is lost.

Take, for example, a chip maker that wins a place in a new smartphone model. The phone sells for three years, and the chip maker supplies millions of chips each year. Consider a car. A chip chosen for a car's braking computer may stay for 7 to 10 years, because cars must pass safety certification. Say a maker of smart bulbs picks a small wireless chip; see IoT wireless chips.

Because a win is so valuable, chip makers send engineers to work with the customer and give free tools; see fabless companies, microcontrollers and phone chips. A win is one reason that systems stay for decades, as in installed base, and the chip's design may be licensed, as explained in semiconductor IP licensing.

How is it different from an ordinary sale? An ordinary sale is one purchase. A design win is the decision that locks in all future purchases of the part for that product.