Prior to the Synopsys acquisition of Virage Logic, Synopsys seemed to have an almost exclusive relationship with ARM. Since then, Cadence and Mentor Graphics have both been cutting deals with ARM for support of its IP cores.

What’s changed? With regard to the Virage Logic acquisition, very little. Synopsys did acquire the ARC processor through that deal, but ARC had been much more focused on high-end audio and supplying all the necessary codecs that it decidedly was not a threat to ARM. And Synopsys and ARM continue to work closely together on a variety of fronts, both in ARM’s support of Synopsys’ standard IP for things like USB and Synopsys’ support of ARM’s processor IP.

But there has been far more activity between ARM and Synopsys’ top competitors of late. In September, Cadence rolled out an optimized implementation methodology for ARM’s new Cortex-A15 processor.  The two companies also created an ARM-Cadence Encounter reference methodology.  And this week, Mentor inked a deal for test and repair of ARM’s memories and processor cores.

So what gives? The answer may be less about competition between ARM and Synopsys than between ARM and Intel (and to a lesser extent Apple and MIPS). The two companies are about to embark on an all-out war in the tablet market and ARM is doing whatever it can to shore up the Cortex-A15 multicore processor as fast as it can. ARM’s big challenge has been performance, which it apparently has solved with the A15, while Intel’s big challenge is still power consumption. ARM has achieved its goal, and now Intel is racing to come up with a competitor, which it expects to introduce early next year.

While this is a new market for ARM, and potentially a massive opportunity, it’s unclear whether this is really a new market for Intel or one that potentially will cannibalize sales of notebook computers and netbooks. And ARM is wasting no time in marshaling whatever forces it can to roll out multiple generations of chips, IP and anything else necessary to win a piece of this new business.

–Ed Sperling

As the design industry plunges into DAC this year, it’s beginning to look like a completely different industry.

It’s not the players themselves. There are still the Big Three EDA vendors, IP vendors and lots of startups. And it’s all still geared toward making chips. But the center of gravity has shifted from what was almost exclusively place and route and synthesis out to the edges of the design.

There is more pressure to do more up front than ever before. There also is more pressure for EDA vendors of all sizes to find unique growth markets that extend beyond the latest process node on the Moore’s Law road map. While there will still be some components that have to be made at the latest process node, there will be many others that do not—particularly as new techniques of building chips such as 3D stacking or systems-in-package with much faster interconnects and networking schemes begin rolling out.

This has set off a positioning scramble the likes of which hasn’t been seen since EDA was a nascent market. As large companies begin reaching out in new directions—Cadence with software and IP, Synopsys with software prototyping and Mentor with board-level design—as well as continued expansion by the IP vendors, we’re about to witness some fundamental shifts that can only be characterized as good.

The mantra among many EDA industry executives is that necessity is the mother of invention. There is plenty of necessity, and right now we’re witnessing the invention.

–Ed Sperling

From the outside it looks like business as usual, but the race for board seats on the GSA has become particularly competitive this year.

GSA originally was created as an organization for fabless companies, but you wouldn’t know that looking at its membership roster. It has evolved into a who’s who of the entire semiconductor supply chain, including everyone from foundries like TSMC and UMC to semiconductor companies like IBM, STMicroelectronics and Samsung to EDA providers like Synopsys and Cadence.

Virtually anyone can become a member of the GSA, and given the list of members it appears that a good portion of the industry has signed on. But you have to get elected to the board of directors, which basically puts you into the center of the customer and supplier ecosystem. The proof is in the attendance numbers. Average attendance at board meetings of non-profit organizations is roughly 50%. The GSA’s attendance is closer to 100%, according to GSA president Jodi Shelton.

For two board seats in two categories there are 13 different executives in the running from as many companies. One is for the broadly defined semiconductor board seat, where 10 different companies are competing. The second is a new category of value chain producers (VCPs), where eSilicon, Global Unichip, and Silicon 360 are each vying for the spot.

While most of this happens behind the scenes—the lobbying for votes with recorded messages and the campaigning to members—what’s interesting is the hidden message behind all of this. The GSA is representative of the industry, and increasingly no company can stand on its own. An SoC isn’t the work of a single company—even at big companies like Intel, IBM or Samsung—which means it’s now increasingly important to be at the center of the ecosystem to remain competitive.

That makes the stakes higher than ever before, and it means GSA elections should become even more hotly contested at every process node—most likely with new spinouts like the VCP definition. And like all complex designs these days, this should get very interesting.

–Ed Sperling

One of the most intriguing trends to watch these days is in the area of diversification and differentiation. As we emerge from the worst downturn in the history of semiconductor design—in fact, the only time EDA has ever shown negative numbers other than accounting changes—companies are looking for new avenues of revenue growth that are significantly different than where they drew their revenue going into the downturn.

There are five very good reasons for this:

1. The downturn has shown many companies they need to be hedged across multiple markets if they want to continue showing growth in future years. Because of the convoluted supply chain, which is spread across continents and across different design cycles, not all parts of the design chain feel the pinch at the same time. As a result, we’re seeing moves into a variety of areas such as Mentor pushing into Android devices and Synopsys moving into software prototyping.
2. Not all parts of the industry are poised for significant growth in the future. There will jam-up of competitors in some areas because there are far fewer design starts. While the design starts that do happen will be bigger and more complex, there will be fewer companies developing them because of the cost. In addition, there will be less creativity in other areas that were consistent revenue sources because rising complexity coupled with a lag in lithography technology is forcing more restrictive rules on designers. Just to get chips out the door at 32nm and beyond will require more regular shapes and layouts, which doesn’t bode well for a slew of players fighting for a shrinking place and route market.
3. The value has shifted from just hardware or software to hardware and software. Co-verification, software modeling and prototyping and even operating system and some application development is being done by chipmakers. Companies that can bridge these two worlds effectively will reap bigger rewards than those doing the same thing they were doing two years ago.
4. The pain points are getting more granular. While SoC design is moving to a higher level of abstraction, verification has more things to test. The models work great for blocks, but now those blocks have to be tested, as well. And they have to be integrated and share resources, particularly in multicore chips. Add in various power modes and power islands and complexity goes straight up and off the charts. That also has created new opportunities for startups to gain entry into the industry, and the big guys are struggling to either absorb them or compete against them.
5. There is growth in tangential markets, and far better security in reaching beyond the classic EDA world. Mentor’s push into DFM and test, mechanical analysis and wiring harnesses is a case in point. Synopsys’ push into IP and high-level synthesis are well beyond its normal flow. Even Magma has pushed into analog and mixed signal place and route.

As we emerge from this downturn—and we are still not fully emerged—these moves are likely to become even more pronounced. What is uncertain is just how the industry will look when these changes take root.

–Ed Sperling

The EDA world is either doing better than most segments of the economy or coming apart at the seams, depending upon your perspective and your definition of exactly what an EDA company is. But at least one trend seems clear: As we push into the world of system-level design from chip design and SoCs instead of ASICs, the high-level trend is broader companies with more complete integrated packages rather than lots of little pieces.

While this may cause all sorts of gyrations and lots of discomfort in the interim, the industry around system-level design tools ultimately will emerge significantly stronger if not overtly different. It has no choice. Either it begins eliminating pain for engineers developing incredibly complex chips or they’ll lose market share to companies like IBM and Toshiba, which already have their own proprietary tools, and the foundries, which easily could cobble together a suite of tools on their own.

To no small extent, Mentor Graphics and Synopsys are well along the path of creating much more integrated flows that reach well beyond the bounds of where they used to be. Cadence clearly sees the need to change, as well, which accounts for the board’s recent actions to boot all upper management—including longtime CTO Ted Vucurevich this week. He mysteriously has disappeared from the management roster, even though the company never announced his departure.

Cadence’s new CEO, Lip-Bu Tan, has more experience on the finance side than anyone since former CEO Ray Bingham, but he also has one other benefit. According to company insiders, he has very strong ties inside China, which Cadence’s board clearly sees as a growth opportunity.

Magma, meanwhile, has gone under a cloak of secrecy in recent months to develop its new strategy. Sources say the company is working on automating parts of the analog flow, but exactly what and how successful Magma will be in that space remains to be seen.

What happens to a number of startups along the way is another question. Our guess is that consolidation will begin in earnest when the economy hits bottom and begins climbing back from the depths of despair. The bigger question is where do the next startups get going. Silicon Valley will still be strong, but not all the VC money will end up there.

What do you think will happen next?