I am from india. In the last 5 years there is tremendous change in a way VLSI is taken by the Engineers and services based comapanies. thousands of electronic engineers pass out every year and the companies are just cashing the opportunity by paying a small amount as salaries to them. What this makes is the product companies prefer to outsource ip’s which are done by double the number of resources in service based companies at less cost. All this comes with a massive setback in quality. Unless product companies realise that this is not the way, no one can help.

Its time for product companies to realise that if you want the cost to come down setup a subsidiary in india and work out.

Anyways i may a too small person to comment on such a large business

Their approach seems to work, as they had projected a loss for 2009 early last year but ended up with a modest profit! And on top of that, they executed an IPO and are now trading on EuroNext. It was a surprise to dig up that info, as nothing appeared in the EDA-related trade press (if Gary Smith mentioned it … I’m not a subscriber, sorry!). But their success may be a hopeful light in the darkness of the past couple of years …

I am not convinced by your arguments. Firstly Oliver says that most of the designs can be done by last year’s tools and hence it is not necessary for any EDA vendor to have all the best in class tools. Some best, some second best and he is there. With the advent of “platforms” more and more companies actually use one company’s tools for the whole P&R. Even if they do not, in P&R for non-bleeding edge designs most companies will do a very decent job. Secondly, the likes of Synopsys and Cadence do have design services and they do not go aggressively because they do not want to be competing with their customers. however if there is an ecosystem where most designs are getting outsourced, they will go after it. Your assertion that EDA companies should sell desing for themselves is already partially true (in terms of IP). Synopsys is the second largest IP vendor after ARM. Thirdly, if cloud computing/SaaS takes over this is likely to be truer.

Again you talk about established leaders in design/flows have access to best tools and experts, I would like to know what you mean by established leaders. If you say Samsung/TSMC, I agree. If you say TCS/Wipro, I do not.

In short, you proposition is that no company has all best in class tool. And I am saying that for the type of designs getting outsourced you do not need best in class tool at each step. The likes of Synopsys, Magma and Cadence have good platforms to tape a chip out on a single platform.

- The focus of the EDA companies should be to grow in the domain of EDA. If they starts getting into services, they may loose their focus- it may not be good for their future and hence for the health of the semiconductor industry. We need to understand why the design houses do not develop EDA tool by themselves- one of the reasons is that it is not their primary focus, they do not want to become specilazed in EDA, also ROI etc … for the same reason an EDA product company should not get into design/Flow services- if at all they get into it then they should try to develop/sell the design for themselves …

- It is hard to believe that one EDA company will have all the best quality solutions/tools inhouse. So, it may not make sense to take the design-steps through the EDA company’s inhouse tool(s) which is/are not the best in the industry.

- The established leaders in the domain of design/flow services is expected to have access to all the best quality EDA tools from different vendors and their experts. This way it will be possible to take a design through the best in class EDA tools in the industry.

- Regarding your comment on cost of license for the third party service companies vs. free inhouse EDA companies, this is not quite true. This was well explained by Olivier in his first post …

Keeping the above in mind, I believe that we should go for outsourcing to third party( non EDA-product ) companies to get the best quality design without compromising the cost and also for the betterment of the semiconductor industry.

Thanks,
–Kanai

Actually, I see these VLSI service companies grabbing a lot of business on the implementation phase of the IC design (i.e., from gate to GDSII). Basically, the place-and-route space. This is becoming more and more of a commodity. And a few of these companies are trying to go to the next obvious step, which is the RTL-to-GDSII flow, some with with notable success.

I’m not sure about how specific embedded designs are for service companies. Usually it requires more IP and software design and testing/verification, and I do not have any information about whether they can provide any significant added value there.

I think EDA should focus more on high (or soon-high-to-be) added-value tools: low power design & optimization, test + simulation + verification, and system-level design (IP+software). These are difficult tasks to automate or/and to perform quickly, and EDA could reduce TAT drastically here. These will command a better business than P&R, which is becoming trivialized for most of the ASIC designs (either the QoR can be met automatically, or lots of know-how is needed to meet the targets, therefore out of EDA’s scope).

Looking at the list of VLSI services companies above and their revenues that you mentioned.. a major contributor to their revenue is embedded design and services space. None of the major EDA players seem to have a big presence here?

Where they offer true differentiation is in the silicon design phase. (Cadence, synopsys, Mentor and Magma).

Most semiconductor companies outsource their WinCE support/Linux/Android work on their chips to services companies. If you think about it this is not an impossible task but semiconductor companies are averse to doing it themselves as they can get it for cheap some where else rather than doing it in house. They offer real differentiation at the silicon level and thats where their core competence has been so far!.

This is just like application software outsourcing and it has been happening for 20 years now. This is not software that can truely differentiate itself like the EDA software.

Do you think EDA can add value by getting into embedded space? I think they will start developing all kinds of software like by doing this to add to their revenues and thats where they will lose their identity.

-Nick

I am not as optimistic as you here. First of all, the added value of a ASIC startup is more in the system than the actual silicon. I don’t think a newcomer that wants to design the next great consumer electronics good will go through the burden of building up its own physical design team. It is more cost-efficient and less riskier to work with IPs and service companies to support the IC design and IC implementation flow.

Second, if a company wants to differentiate at the silicon level, then I have to say that getting an edge on power is not something EDA tools do very well. Power optimization is still a very manual process, which requires quite a lot of expertise. This is definitely an aspect of the QoR where a service company can provide a value that EDA tools cannot (yet).

EDA does have the upper hand in understanding the technology and the nuts and bolts of a CAD system, but that does not mean that this is a healthy business. Growth in EDA has been pretty much flat for the last few years. Analysts predict that EDA will follow their customer’s growth in the next 5 years, but as the number of ASIC design starts goes down, this means you have to convince the customers to pay more for tools that still have to meet their promises in terms of scalability and performances –which, for the most part, they did not entirely fulfilled.

I don’t see EDA having the upper hand when it comes to working out a business partnership with the semiconductor industry. At best, EDA growth will be aligned to the semi’s, while EDA is already hurting. At worst, EDA will provide the software tools that will be the utilities of a much larger service industry. If EDA can establish a real partnership with its customers, and if the customers truly appreciate the value of a vigorous EDA industry, then we might see innovative business models that would benefit both side. Until then, I don’t see how EDA can improve its business foothold.