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Discussions about R&D return-on-investment (RoI) among semiconductor industry executives often turn to engineering productivity. They're often surprised when I assert that productivity isn't that important—at least as far as R&D performance metrics are concerned. A far more important metric is engineering throughput.

Throughput measures rate of output and therefore quantifies how fast you develop products. Productivity measures how efficiently you develop them. Throughput is about cycle time. Productivity is about cost. The more productive your teams, the fewer engineers needed to develop products—hence the lower the development cost. But what's more important, cost or time-to-market?

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