Product Development & Management

Driving Innovation: Quarterly Automotive & Semiconductor Trends with Neil Stroud

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In this image, we show a vehicle lit up by several digital points to portray automotive & semiconductor trends.

In the world of automotive and semiconductors, where the pace of technological innovation seems to accelerate daily, staying ahead of trends is critical. That’s why we sat down with Neil Stroud, Jama Software’s industry expert with decades of experience spanning major players like Intel, Arm, and Samsung. Neil has been at the forefront of the functional safety and semiconductor evolution, witnessing firsthand the challenges and transformative changes that shape these industries.

In this exclusive interview, Neil shares his unique perspective on the latest industry dynamics, the impact of global supply constraints, and how the automotive industry’s strategic relationships with semiconductor vendors are evolving. He also discusses Jama Software’s role in helping both sectors address increasingly complex requirements and integration challenges, driving efficiency and reducing risk across the supply chain. Join us in exploring how Jama Connect empowers companies to manage complexity, enhance traceability, and accelerate their time to market.

Driving Innovation: Quarterly Automotive & Semiconductor Trends with Neil Stroud

Kenzie Jonsson: Thanks for sitting down with me today, Neil! I’d love it if you could spend a little bit of time telling us about your background and career path.

Neil Stroud: Prior to joining Jama Software back in April of this year, I’d spent most of my career in the semiconductor industry, working for companies like Samsung, NEC, and PMC-Sierra. I also spent 12 years with Intel, and then moved into the IP space with Arm who are one of the key players in semiconductor IP. Directly before joining Jama Software, I spent time with CoreAVI, a niche software company in the safety-critical graphics space. Almost twenty years of my career has been spent in the functional safety domain. It wasn’t by design; it was more by accident. I didn’t set out to get into that domain at all. It all came about through my time at Intel where I was calling on a big industrial automation company and they asked me the question, “Hey, so when are you going to start supporting functional safety with Intel architecture?”

Of course, at that point, I didn’t know what it was, what it meant, what it was all about. One thing led to another, and I stumbled into the world of functional safety and was given a great opportunity at Intel to go… I was going to say, go and lead it, but it was more me volunteering and saying, I think we should be doing this. And Intel the senior leadership at Intel saying, “Oh, go on then, go do it.” That’s exactly what I did. So, it was quite nice because you’re acting as a startup within the safety of a big corporation like Intel. At that point you start to look at the fundamentals – what does safety look like? What do we need to do as a company? How do we sell it? How do we make money out of it? What are the technical issues? What problems are the industry facing? That kind of stuff. So, I pretty much became a GM of my own startup at that point, which was a great experience.

That was back in the day when complex semiconductor functional safety wasn’t really a thing. So, we were blazing the trail, not just for Intel but for the whole industry. So, little did I know back then where it would lead. It’s been so much fun. That’s also what took me to Arm – to drive the whole functional safety strategy across their ecosystem. So, all of that obviously led me into adjacent businesses especially automotive, as safety is of paramount importance where I worked with the big OEMs and throughout the supply chain. Now here I am at Jama Software bringing all of that experience of semiconductor, automotive, and software and apply that into the requirements management tools domain to drive our presence and growth in the automotive and semiconductor segments.

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Jonsson: What changes have you been part of at Jama Software recently to help us better meet the needs of our customers?

Stroud: It’s a really interesting time to join Jama Software. Obviously, we’ve been successful as a company over the preceding years. I’m amazed by the number of different market segments that are using Jama Connect. There are some obvious ones like automotive, semiconductor, medical, consumer electronics, and aerospace and defense. But there are some emerging segments as well, which is great to see, like insurance companies and state departments and beyond. Clearly, Jama Connect is a tool that transcends verticals. But of course, we need to be able to tweak and tailor that to accommodate the unique needs of each market segment. Functional safety and cybersecurity are great examples of these differences. That’s what’s exciting as part of the change with Francisco Partners acquiring us back in April for $1.2 billion. That to me is a leading indicator that they’re betting on us to continue growing and we are investing heavily to continue to delight our current customers and of course help new customers achieve new levels of innovation. Placing that bet is exciting for all of us at the company. As a result, one of the changes we made at that time was to really double down on the vertical focus. So, bringing in an organizational structure that allows us to do and in turn drive even more alignment with the needs of each market segment.

It’s good for us. But more importantly, it’s good for the customers because we can talk in their language, we can better understand their problems, and of course we can partner with them to solve their problems. And that in turn means tailoring our product to better suit their needs. So, it’s a win-win. It’s a confirmation of the importance of those verticals to Jama Software and sends a clear message to that we are listening and here to partner with them on their growth journey. So, it’s exciting for me and I see that excitement across the whole company.

Jonsson: Can you tell us what you’re seeing in the industry with the conversations that you’re having with our customers and prospects?

Stroud: Well, I cover both automotive and semiconductor industries. There’s obviously a lot of overlap between the two, and I think that’s an increasing trend we’ve seen over the last few years. The automotive guys have been building a lot more of a strategic relationship with the semiconductor vendors. Not least because when the supply constraints kicked in a couple of years ago, production lines were coming to a halt because they couldn’t get hold of the smallest, tiniest, cheapest components. And at that point, it is interesting how it created a real forcing function. The automotive segment said at that point, “Right, we aren’t going to get burnt again.”

So, they did one or two things. Some went out and tried to tie down the semiconductor vendors contractually to say, “Look, in the event that this happens again,..” and it will happen again because the semiconductor industry tends to work on about a seven-year cycle of oversupply versus constraint, “we want to guarantee our component supply.” The car OEMs and tier-one suppliers obviously didn’t want to get caught in that again. I don’t have visibility into how successful those discussions were, but I don’t think it will necessarily prevent a recurrence. The good news is that there is huge investment going into building new fabs that will provide significant capacity increases in the coming years.

The other interesting dynamic that happened was some of the auto guys said, “Well, screw that. We’re going to do our own silicon.” It sounds easy when you say it quickly, but there’s an awful lot to it when you commit to that solution. Questions like, “Okay, so how are you going to do that?”, “Are we going to go and engage with a design house or we’re going to hire a team of semiconductor design engineers,” “Which fab supplier will we use?” “Will they guarantee supply?”

It’s not a trivial undertaking and to make it work from an ROI perspective it’s probably a ten-year journey. And in the meantime, you’ve still got to work with what you’ve got. The other issue is once you get down that path, you are committed and it’s an expensive commitment to make. The downside is you don’t get the benefit of volume that the big guys like Qualcomm, Samsung, MediaTek, or NVIDIA can offer you. They build millions and millions of chips and can amortize the cost across many customers and markets. If you’re building your own, you don’t get that advantage, but you mostly own your own destiny. So, pros and cons.

So that’s one dynamic. I think the other dynamic we’ve seen in automotive generally over the last five years is a repositioning of what’s important. If we go back, even just five years, we all thought we would be driving autonomous vehicles right now. There’d be mass deployment. You and I would both have one on the drive. Of course, that hasn’t happened because we all realized how difficult it is. I think we were in denial for a while, but that forced us to pivot to solving the software defined vehicle challenge. If we can get that taken care of, then that kind of leads us to the autonomous world anyway. And we can solve it in bite-sized chunks. So thankfully the automotive industry and the semiconductor industry, and probably lots of other industries now are focused on a software-defined vehicle as an intermediate step.

Solving this challenge doesn’t just apply to road vehicles. I think when you look at industrial automation, that’s the same. Do they want to get full autonomy? Of course they do. Is it a challenge? Yeah, it is. So, software-defined has a role to play there. Same in A&D, same in a lot of the other verticals. So, there are a lot of synergies between the verticals as well. That created, I think, clarity, but it also created a seismic shift for the car OEMs in that the OEMs themselves, and I’m talking more about the incumbent suppliers, the big guys like VW, Mercedes, Ford, GM and others. History shows they’re so used to being completely in charge of their own destiny – when you need something, you just put a team together and you go build it. Those days are gone. You look at complexity in a modern vehicle, whether it’s the hardware or the software, you just can’t do that these days. It’s not scalable.

So, you have to rely on the supply chain to drive the innovation and deliver those pieces, those elements, and then you as the OEM have to integrate them. But that’s not a world they’re used to. And it obviously introduces a whole world of complexity.

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Stroud: That’s another area where using Jama Software really pays dividends to ensure the whole supply chain is seamlessly connected from a requirements perspective resulting in faster design and delivery across multiple vendors and a better-quality product overall. A modern vehicle can have upwards of 100 million lines of code going into a modern high-end vehicle and this is increasing exponentially. Those software elements are coming from a hundred different vendors. Some of those are safety-related, and some of those are security-related. All of a sudden as an OEM, I’m responsible for integrating all of that, checking it works together, checking it’s still safe, checking it’s still secure, and then rolling it out through the door for consumers to go and purchase a new vehicle.

At the same time, vehicle suppliers can use this new SDV approach to drive new business models that allow post-sales upgrades and updates. If a car doesn’t have a feature on the day of sale, in a year’s time the owner could say, “Hmm, it’d be nice to have that new feature.” You log into your account, put your credit card details in, and as if by magic, the new feature arrives over the air to your vehicle the next day. That’s a whole new world and we are only scratching the surface today.

So, I guess the punchline is from our perspective, and doing what we do, it’s all about efficient requirements management and traceability. This applies not just to the OEMs, but throughout the supply chain as well, to ensure the elements from those hundreds of different vendors all come together. Those requirements have got to be exquisitely accurate and all the independent interdependencies mapped out correctly to be sure that you’re not violating a safety goal or creating a bug in the system.

This way you get into traceability… How well is my project going? How healthy is it? How many of those requirements are covered right now and tested and using that capability to reduce the number of recalls, drive efficiency in the design team, reduce the risk, all those good things. Of course, this level of detail isn’t just important to the engineering teams. It can also be rolled out to senior management who are likely more interested in risk, cost, time-to-market and so on.

So, the market’s really coming to us. Jama Software is now the largest supplier of requirement management solutions overall, which we’re immensely proud of. But we have to learn from the market and our customers how Jama Connect changes grows and morphs as a solution to enable that ubiquitous risk reduction and efficiency improvement. So, there are some big factors at play.

So that’s automotive. The semiconductor segment is interesting as well. It’s a very different world, with different care abouts.

We’ve done very well in the semiconductor space overall, but it still frightens me to see how many spreadsheets are used to manage the business in the big semiconductor companies. And that’s speaking from experience because I lived in that world for a long time. There are way too many spreadsheets out there for doing requirements tracking. When you’re working that way, there’s no single source of truth and that will get you into trouble, guaranteed. It will cost you big with bugs in the silicon. So, it’s imperative to partner with the semiconductor industry and really drive change, accelerate innovation and solve tomorrow’s supply constraints. That’s on the chip design side, but also more recently, we’ve got the CHIPS Act, which is kick-starting a massive investment in the semiconductor industry to drive fab capacity to meet the huge growth in demand for chips.

So, we see the big players such as Intel, Samsung, and TSMC, all investing billions and billions of dollars to put fabs into place to meet this growth in demand and technology, which is exciting. The challenges are different to the auto market but guess what, these chip manufacturers need robust requirements management to run their business. And again, a lot of it’s been running on spreadsheets for a long time.

Now, we’re seeing, of course, headwinds in both industries. We still see that with EV vendors on the automotive side. We see even today challenges in the semiconductor industry with some consolidation of cost and trying to get costs under control. Jama Software has a critical role to play in that transformation. We can help drive efficiency and shorten cycles and time-to-revenue. All those things play into huge cost reductions for all. We are using our expertise in both product and deployment to educate and drive incremental success for our customers.

Kenzie Jonsson: Thank you for your time today, Neil! I really enjoyed this conversation, and I look forward to catching up with you next quarter!

Neil Stroud
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