The Business of EDA:EDA People and Conferences and Summary of The Business of EDA.

EDA People and Conferences

Nora

(back at her desk) Hi, Sanjay. I just finished talking with Frank, the CFO. Thanks for the suggestion. Are there any other key industry players I should be aware of?

Sanjay:

Yes, plenty of them. Although small, the EDA industry has had some colorful personalities in its brief history. Many interesting people have started or worked for EDA companies. Some have been brilliant researchers, gifted marketeers, and others have not been considered "paragons of virtue"! Some have started companies, and some have sold their company and gone off to start or lead another. The migration of people within the EDA industry is an interesting story.

A while ago, there was a very colorful lawsuit in the news. Here is a summary of that.

Nora:

You are right. EDA is more colorful than it first appeared.

Sanjay:

Other people honored for their contributions to EDA have been awarded the Kaufman Award. The Electronic Design Automation Consortium (EDAC) sponsors this award.

The Avant! Debacle

Gerald Hsu worked as a vice-president at Cadence with a goal of driving a small tool competitor out of business. He ended up joining the competitor as CEO, and he formed a new company—Avant! Avant! grew rapidly to provide a fairly complete tool set using a central common database (something their competitors lacked).

However, one of Hsu's new employees came from Cadence, allegedly with the software for a key Cadence tool. According to the prosecutor, the case was unique in that there was a large, publicly traded company that was founded and built on stolen property.

A long, ugly lawsuit evolved. Cadence won, millions in fines were levied, and people went to jail. Four top Avant! executives went to prison, but not Hsu.

The case dragged on for six years. The defense team got three judges to excuse themselves. Avant! ran an extensive media campaign to promote its side.

Avant! was eventually bought by Synopsys, Cadence's arch-rival. The episode illustrates both the value of trade secrets and the difficulty of keeping them secure, even internally.

Many EDA companies are constantly involved in legal cases. These are typically related to patents, trade secrets, sales agreements, or partnerships. Legal cases can be draining on resources and executive time. Cases often drag on for years. The Avant! case set a precedent within the software industry for successfully prosecuting the theft of source code.

People Opportunities

Nora:

I noticed that the industry seems to have CEOs from every part of the world.

Sanjay:

You are very observant. As an industry, EDA is exceptionally open to minorities and women. Most large EDA companies are based in the United States. However, there are some European and Asian companies. Many companies have research, design, and support groups in Europe, Israel, India, Japan, Singapore, China, and Taiwan.

Advancement is mostly based on merit. There are few "glass ceilings" or "old-boy" networks compared to other industries. There is also a natural liaison with academia for both staff and startup ideas.

As a startup business, little capital equipment is needed. Venture capital is primarily used for staff costs. Without plant or manufacturing costs, developing EDA software programs can earn a good return.

Nora:

That's encouraging.

Key Conferences

Nora:

Are there any EDA conferences that we participate in?

Sanjay:

Yes, several. Key EDA conferences include:

Design Automation Conference (DAC). The largest EDA conference has an unusual blend of industry and academia. There are technical sessions, panels, elaborate exhibits with professional entertainers, and large parties. There are canned demonstrations (demos) and serious customer private sessions in closed cubicles. It is held in June in different cities.

International Conference on Computer Aided Design (ICCA). This conference features mostly academic and technical papers. It is held in San Jose in November.

Design Automation and Test Europe (DATE). This is a major EDA/Test conference. It offers a mix similar to DAC, but much smaller. It is held in Europe in February.

International Test Conference (ITC). The major test and test equipment conference. It is held in September or October, usually in the United States.

(See Appendix E for more detail on conferences.)

Summary

EDA is a relatively small industry compared to the electronics, semiconductor, and software industries. However, it is a critical part of the success of these industries.

There are some 200 companies and over 50 kinds of EDA tools. EDA companies must continue to innovate to keep up with the on-going and rapid advances in the semiconductor industry.

EDA users are willing to pay for expensive EDA tools to achieve the TTM and design complexity which their products require.

EDA companies can make a good ROI because a relatively small work force investment can result in sales of an expensive, needed product.

EDA companies usually start out as spin-offs from existing companies or as startups from university research.

Some product or semiconductor companies develop their own tools, but a majority use EDA vendor tools.

The competition and TTM needs have resulted in several different IC architectures. These include Gate Arrays, Standard Cells, and Field Programmable architectures. Each (and their variations and mixtures) fills a need, depending on the application.

There are a variety of EDA business model issues such as new tool development, licensing models, mergers and acquisitions, application service provider, and design services.

EDA is a small but essential piece in the growth of the semiconductor and electronics product industries.