Move reflects shift to IP and other areas outside of classic EDA.
The EDA Consortium today changed its name to the Electronic System Design Alliance, a move that expands the group’s charter to reflect shifts that have been underway in the chip design world for some time.
Those shifts include the growth in IP and an increased focus on software development. Classic EDA, from place and route to synthesis to back-end debug and verification, are still very much the core of this market. But vendors also have broadened their focus into adjacent markets. This is evident in the latest EDAC sales numbers, which show that in Q4 of last year IP sales surpassed computer-aided engineering.
“EDA is still critical,” said Bob Smith, the ESD Alliance’s executive director. “But we also recognize this industry is now bigger than just EDA. It’s a design ecosystem. In the past, IP has been important, but it’s now the fastest-growing segment. That’s a proxy for the semiconductor industry at large. It’s tends to show what’s really going on. This is a way of making this organization very relevant again.”
EDAC was formed in 1989, when EDA companies were generating huge huge buzz on Wall Street due to rapid growth, high returns, and a frenzy of VC activity that included startups and IPOs. Mentor Graphics was started in 1981, Synopsys in 1986, and Cadence in 1988.
But beginning in the late 1990s, that buzz began to wear off due to consolidation in the semiconductor and OEM industries and increased complexity of both chips and tools, which raised the amount of capital needed for startups and increased the time it took to reach IPO. On top of that, the possibility of successful IPOs shrank after the 2001 downturn, pushing investors into software rather than semiconductors and EDA.
While this didn’t lessen the need for EDA tools, it did change the fundamental dynamics of this sector. So as big companies acquired startups, the startups were not replenished as quickly. The bigger companies also began diversifying into new areas to sustain their growth, including everything from solutions targeted at verticals such as automotive and aerospace, to IP, software, and new services.
“IP is a big part of that, and so are the tends of thousands of people who write code at the embedded layer,” said Smith. “We’re also seeing a big push to connect together individual chips using advanced packaging. This is a $15 billion to $20 billion industry when you include packaging and IP. And we have an opportunity to be the voice of the whole ecosystem. So if you look at Europe, that’s been a hotbed of system design. There are fewer design starts, but they build systems out of those.”
He noted that 10 years ago there were nearly 200 member companies in EDAC, and a year ago Atrenta was a board member. The challenge now is to expand the member company base, and the only way to do that is by expanding its focus.