Plenty Wise, Less Foolish

Selling more tools to fewer large customers has always seemed like a tough proposition for the tools industry. Remarkably, it seems to be getting easier. In fact, the more chipmakers push into advanced geometries, the more engineering managers are speaking up at industry conferences about a direct correlation between the number of tools they buy and the amount of time and money they save.

This is an interesting shift, and one not seen in EDA since the booming 1990s. Since then, selling more seats has been a challenging proposition, to put it mildly. Most customers have tried to eke another generation of chips of out their tools, delaying and delaying their purchases, and prompting heavy investment by EDA vendors in “adjacent” markets.

Apparently the chipmakers can delay their tools purchases no more. Complexity has gone through the roof, particularly with software integration and power issues, and time-to-market with a functional chip that can yield sufficiently and also uses less energy has become a particularly vicious cycle. Throwing engineers at the problem armed with spreadsheets and tools that take days to simulate instead of minutes isn’t an effective solution. Throwing outdated point solutions at system-level problems doesn’t work, either.

The question now is whether this begins to spread downstream into midsize fabless companies, particularly with 2.5D, and whether this also creates momentum for the kinds of cloud-based debug solutions proposed by Synopsys, Cadence and Mentor. Selling more new tools to large customers is a good business, but hedging it across multiple sectors is even better. And better yet, it would provide fuel for an extensive re-investment in tool development as EDA companies begin battling for increasingly lucrative market share.

After more than a decade of relatively flat performance, EDA apparently is being recognized as critical again—and not a moment too soon.

–Ed Sperling