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Peggy Aycinena
Peggy Aycinena
Peggy Aycinena is a freelance journalist and Editor of EDA Confidential at She can be reached at peggy at aycinena dot com.

EDA Death Spiral: Qualcomm/NXP last nail in coffin

October 27th, 2016 by Peggy Aycinena

Raise your hand if you think innovation comes out of small, nimble, edgy startups
. Keep your hand up if you think consolidation is antithetical to the inventive culture closely associated with small, nimble edgy startups where everybody works outside of their job description and above their grade. Now put your hand down and tell us what you think about yet another merger in the semiconductor industry.

Yes, happy for investors that Qualcomm is buying NXP, but the end result will be a nasty one for technical innovators in EDA. Yet another reduction in the number of customers for EDA tools. Not necessarily a reduction in the number of seats, but a reduction in the number of actual separate corporate entities looking for tools for chip design.

Of course, for those who love large, lumbering organizations with almost as many people in the typing pool as in the engineering pool – more consolidation is great news for the semiconductor business and for the electronic design automation business, as well.

However, for those who still remember when EDA was a Wild West full of crazy startups, wacky business ideas, and loads of shifting sands between a constantly morphing/re-morphing population of EDA startups and an also-always morphing/re-morphing population of chip-design customers – take note: Those days are gone. Forever.

Now it’s just going to be one mega EDA giant versus one of the other two mega EDA giants – which if Cadence buys Mentor will only be one mega giant – as they rumble and lurch through big deals with BIG customers, over golf games, special offsite selling junkets, and enough all-you-can-eat tool packaging deals to sink an aircraft carrier full of bland, tasteless Happy Meals.

Not to mention increasingly ponderous layers of EDA political influence peddling, and enough overt efforts to control the standards conversation in favor of their particular technology to make even Microsoft blush.

After all, the mega-semiconductor customers are only going to allow themselves to be serviced by mega-EDA companies. They will be otherwise impenetrable from an EDA sales point of view, especially if you’re a startup peddling new, untested technologies.

Also an EDA startup buzz killer in the Era of Consolidation? From IT to Purchasing, the fewer EDA tool vendors the better. The customers know it and the Big Three in EDA are rubbing their hands together in ecstasy over the situation.

And so the EDA industry is on the threshold of becoming nothing more than three calcified mega-cities of employees laboring away in huge, behemoth mother ships [read Death Stars] equipped with unlimited fire power. Each one of them more than capable of shooting down even the smallest inkling of out-of-the-box, freewheeling thinking. Able to extinguish with a single cease-and-desist the kind of zany zeitgeist that lead Mad dogs and Englishmen to actually contemplate starting a startup in EDA back in the day.

Yeah, it’s over. EDA as it was is over. Dead. The coffin shut. The lights gone out. The party ended. The bubbles burst. Taps have played out their mournful tune. The sun has set. It’s over.

Now only one question remains.

If you want to do a startup – crazy you. If you want to sorta feel like you are your own boss – crazy you. If you want to do something new, different, with possibly some grand upside potential. What can you do?

It’s simple. Do a startup that provides IP.

Forget about doing tools – although some sort of CAD assist to help integrate your product into the larger design would be helpful – but really, forget the tools.

Do IP.

There’s still a whole universe of opportunities out there in IP. And the needs are so pressing, the opportunities as big as the untamed prairie, the uncharted spaces at yet unmapped.

It won’t be easy, of course. It will require deep subject knowledge, a steady business sense, and nerves of steel to go up against existing IP behemoths such as ARM and Synopsys. But really, life is short. Live on the edge. Do a startup

Do IP.

October 27th Press Release …

Qualcomm Inc. and NXP Semiconductors N.V. today announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Qualcomm will acquire NXP. Pursuant to the agreement, a subsidiary of Qualcomm will commence a tender offer to acquire all of the issued and outstanding common shares of NXP for $110.00 per share in cash, representing a total enterprise value of approximately $47 billion.


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3 Responses to “EDA Death Spiral: Qualcomm/NXP last nail in coffin”

  1. John Blyler says:

    There’s one more nail that must be driven.

  2. Kevin Cameron says:

    I reckon the way forward is by developing tools for Software-Defined-Hardware – e.g. compacting Neural Network descriptions for use in mobile. Neural Networks are hot, and there are a bunch of interesting target platforms like the various FPGA/CPU combo chips out at the moment.

    The EDA companies are mostly dinosaurs, it remains to be seen if any can evolve wings…

  3. Steve Chappell says:

    Speaking of things that have already been gone forever… “typing pool”???
    Thank you for reminding me that I’m not THAT old.

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