Current commercial EDA vendors comprise a mix of a large number of small to midsized point tool providers and a small number of large full RTL to GDSII (and beyond) tool suite providers. While these vendors differ in the scope of solutions they provide, they follow the classical product centric approach of developing once and offering the same solution to various customers. This approach involves identifying a common set of requirements for a mainstream set of targeted users, and then developing a tool with features that best matches those requirements. This makes economical sense for both the EDA vendors and their customers if the tool requirements are mostly uniform and available to EDA vendors. It leads to an efficient distribution of expensive EDA R&D investment over multiple customers, bringing down the cost for everybody.
One-size-fit-all approach may no longer workHowever, conditions now developing indicate that this product centric approach may not continue to work in all cases because Semiconductor companies have increasingly different requirements:
• Top semiconductor companies are experimenting with new process technologies to differentiate their offerings. Some
process technologies may even involve a change in the way design is done for those technologies. Case in point is 3D
semiconductor technology. Such a vertical wafer level integration technology requires a complete overhaul of the physical designtools to derive key advantages being offered by the technology. However, since there is not enough demand for the 3D tools currently, it would not make sense for current commercial EDA product companies to develop specialized 3D tools. A
semiconductor company facing this would probably develop these tools in-house.
• Silicon success at finer geometries such as 65 and 45nm requires closer interaction between the design and manufacturing teams. This interaction would need to be captured in the next generation DFM/DFY tools. Many commercial EDA product companies are working on overhauling theirs to capture the re-tooling market window that opens up due to the move towards finer geometries. However, there is a key missing link here. The Integrated Device Manufacturers (IDMs) that have both design and manufacturing knowledge base, are actually best placed to bridge the gap between the design and manufacturing domain. To protect their proprietary knowhow they may not share their key requirements to EDA product companies but rather develop
their own DFM/DFY tools.
• In response to the growing overall system level design complexity, there is an emergence of new programmable platforms which are hybrid forms of traditional ASIC, FPGA and embedded single/ multi-processor architectures. Since each platform
has a unique architecture as its key selling point, the application design and verification tool chain needs to be tailor-made for each platform. Apart from traditional ASIC and FPGA vendors, these platforms are being offered by venture capital backed start-ups that are targeting specific vertical markets. Again, without a proven large user base, commercial EDA product companies would not be able to provide tailor-made tools for each programmable platform vendor. The platform vendor would need to develop the application development tools in-house to offer an integrated design platform to users.
It is therefore apparent that the product centric, one-size-fit-all business model will increasingly fail in near future. In fact, recent EDA market studies indicate a stagnation of the total commercial tool market with sub-10 percent growth forecasted for this year. Therefore the industry must find new ways to increase the market size.
Growing importance of in-house EDA toolsIn contrast, in-house EDA tool development of semiconductor companies seems to be growing. Recently, Gary Smith, chief EDA
analyst at Gartner Dataquest said that 27 percent of engineers were using in-house tools in 2004 as compared to 9 percent in 1997. Also, in-house EDA tools have increased their spending 9 to 12 percent in 2004. While it is hard to estimate the size of the in-house tool development segment, some estimates made of the value of customer-built EDA tools indicate this market to be over $1 billion.
In-house EDA tool development is often overlooked. Looking at the historical profile of the EDA activity, the 1970s and ¡¯80s saw vertically integrated semiconductor companies doing completely in-house EDA tool development. From the late ¡¯80s and into the ¡¯90s, there was a gradual shift in the landscape with independent EDA companies emerging and offering competitive point tools. Some IDMs started offering their inhouse CAD tools commercially as well. Since the mid-90s one can see the maturity of the EDA industry with EDA companies offering full tool suites. At the same time, a number of IDMs dissolved or spun out their EDA groups. Conditions are now developing that would lead to a re-emergence of in-house tool development inside semiconductor companies on a larger scale.
Customer centric customized tool business model is requiredTo tap this in-house tool segments, EDA vendors would need to change the current product-centric business model and move towards a more customer-centric, customized tool development model. This would allow EDA companies to develop and license key re-usable EDA modules and then enhance/extend them for specific customer requirements as a services engagement. This allows an EDA company to profitably develop specific features for a customer and spread the cost of common R&D involved in developing re-usable components over a sufficiently large number of customers.
In each of the EDA domains, these common re-usable components are identifiable. Case in point is post layout tools. Any of post-layout tools, including DFM/DFY tools require a geometrical data-organization to represent the layout information and a host of geometrical operations to process the layout information. Moreover, support for various layout data formats and databases such as GDSII, OASIS and OpenAccess needs to be built in. This infrastructure represents an important but nondifferentiating portion of post-layout tool development and can take up to 50 percent of the overall effort. Such a re-usable building block can be developed and licensed to EDA users while the specific application development on top of the building block can be developed as a service depending upon requirements.
The re-use of EDA building blocks reduces the overall cost of development and time to deployment of such customized EDA tools. The customized portion could be undertaken as a service engagement or the customer might choose to do it in-house. The customer could also allow the EDA vendor to offer the customized tool commercially and thus both parties make a further
financial up-side. Or the customer might choose to retain exclusive rights on the customized portion to protect its competitive advantage.
To execute the customized business model, EDA companies need to combine product development and selling skills with services execution and project management skills. This model requires that the services component be profitably executed, thus requiring expertise in software project management and related processes including requirements gathering, scope definition, and price estimation, delivering on time and within the pre-decided cost and quality parameters. At the same time confidentiality and IP protection concerns of each customer need to be addressed.
Over the last decade, Indian software services industry has excelled in exactly these practices. IT services companies in India have developed off-shore software project delivery processes that leverage on the country¡¯s software talent base and provide cost-quality combination. EDA companies can also leverage the skilled technical software developer base in India to move towards a customized business model by either setting their own development centers or by partnering with an existing EDA software development services provider. The off-shore center can be the center of excellence for providing value added customization services for specific requirements of customers. It can also help accelerate the re-usable EDA building block development. This combination would help EDA companies profitably tap the so far ignored in-house EDA market.
Reference:[1] ¡°Homegrown tools - EDA customers still cling to their own software¡±, Geoffrey James,
Electronic Business, 6/15/2003.
http://www.reed-electronics.com/eb-mag/article/CA30-4128?pubdate=6 percent2F15 percent2F2003
