The Best of Times, the Worst of Times: Part 1

Way, way too much happening in the world. Can’t fit it all into one edition of EDA Weekly, so here’s Part 1. Stay tuned for Part 2 in November.

Third time’s the charm …

This is my third attempt to assemble some words about the financial crisis for this edition of EDA Weekly. My first attempt was a long weepy do about my father’s impoverished childhood during the Great Depression, and how his widowed mother lost their farm to foreclosure in 1936 to the Bank of Italy (now better known as the Bank of America). That set of paragraphs ended up being way too maudlin, even by my standards. They went into the Recycle Bin.

My second attempt was a long blather about how the 12-month decline in the value of SNPS and MENT – down 40% to 50%, respectively – has more/less tracked the woeful decline in the S&P 500, Dow Jones, and NASDAQ over the same period, and therefore may not be a reflection of poor fundamentals at Synopsys and Mentor. That LAVA and CDNS are down 78% over the last year, however, may be significant; the fundamentals at those organizations may indeed be suspect. But those sets of paragraphs seemed to be rehashing the obvious, even by my standards.

So, in a third and final attempt to say something of value about this unholy mess we’re all wading through, I’ve decided to just be honest. It’s Sunday, October 12th, and I have no idea – and, unfortunately, neither does anybody else – what’s going to happen in the markets when Asia awakens this evening, California time. By tomorrow morning, when you’re reading this with one eye and watching the markets with the other, whatever that international gaggle of financial brain surgeons are doing in Washington this weekend may, or may not, have helped to stabilize the world.

[ Editor’s Note: As of Monday, October 13th, the markets seem to be responding. The major indices are moving up in most markets.]

No matter what happens, it still seems obvious to me that the attitudes that have translated into success in Silicon Valley are the same attitudes that would help move the world forward. Tough-minded investments in cutting-edge ideas, a commitment to innovation, restless thinking, and the willingness to reinvent ourselves over and over and over again. That’s not all that characterizes Silicon Valley, but it’s a big part of it. It’s not top-down problem solving; it’s organic, competitive, and cool.

Would be great if the Genie of the Valley would emerge from its Magic Lamp and grant 3 wishes:

  1. Massively parallel compute platforms that could accurately predict markets, and provide damping functions when those markets go gaga.
  2. Somebody with a BSEE or BSCE to finally stand at the helm of the world.
  3. Humility to replace hubris when it comes to demanding salaries and compensation. Tens of millions of dollars paid to any particular individual for a 3 or 4 years’ work – particularly when the results have been absolutely disastrous – is nonsensical, oligarchic, and provides the seeds of revolution, whether on Wall Street or within the EDA Nation.

Old numbers in a Brave New World …

* EDAC announced Q2 2008 revenues on October 9th. Unfortunately, the markets have moved so fast since the close of Q2, those numbers are of somewhat reduced value at this point. If we’ve really kicked a global recession into high gear over the course of Q3 and on into Q4, the fact that EDA revenues for Q2 2008 are only “slightly down” compared to Q2 2007, may not bring comfort to the worldwide sales force at EDA, Inc.

Nonetheless, here’s the quote from the October 9th press release. Per EDAC’s current chair/fearless leader, Mentor Graphics’ Wally Rhines: “Solid year-over-year growth in the PCB/MCM and services segments were offset by declines in CAE, IC Physical Design & Verification, and Semiconductor IP, resulting in an overall decline for Q2, 2008. Geographically, Western Europe and Japan showed growth in Q2, but this growth was offset by declines in North America and the rest of the world.”

Also in the October 9th EDAC press release: Companies that were tracked employed 28,004 professionals in Q2 2008, up 7 percent from the 26,164 employed in Q2 2007. If rumors on the street regarding layoffs at several EDA vendors prove true, those numbers may read differently the next time the EDAC MSS numbers are released.

Clearly, the EDA industry, sales and employment, is only as strong as the customer base. For more discussion on that customer base, take an hour to listen to an October 9th discussion aired on San Francisco’s KQED. Host Michael Krasney discusses Silicon Valley and the Financial Crisis with Carl Guardino, head of the Silicon Valley Leadership Group, and others.

The next 30 days in Silicon Valley …

* October 22ndCadence announces Q3 numbers

* October 29thKaufman Award Dinner

* November 4th to 6thMentor User2User Conference

* November 4thU.S. Presidential election

* November 6thSynopsys Interoperability Forum

* November 10th to 13thICCAD 2008

Gladiator II: Master & Commander, Musician & Chief

* At long, long last Aart de Geus is being honored by the EDA industry. Way overdue is the awarding of the Phil Kaufman Award to this Master & Commander of electronic design automation. Well over 90% of the chips in use today have been designed using that anchor tenant of the Synopsys’ Tool Box, Design Compiler, and the litany of Aart’s contributions to the technology and business of electronic design only starts there. The glitterazzi of EDA will be out in force at the annual Kaufman Award Dinner on Wednesday, October 29th, to honor Aart de Geus. You should be part of the celebration.

By the way, Inside Edition reports that Russell Crowe is hoping to play Aart in the upcoming biopic: Master & Commander, Musician & Chief. Should Mr. Crowe show up for the EDAC dinner on October 29th to press his case for the part, here’s a word of advice: Get Dr. de Geus’ signature on your program before you get Mr. Crowe’s. Aart’s impact on life as we know it will be judged by historians to outweigh that of Mr. Crowe’s by several million orders of magnitude in the upcoming millenium. Hence Aart’s signature will be a helluva lot more valuable to your heirs than poor Mr. Crowe’s. It’s true that like de Geus, Crowe is also a musician, but I’ll bet even Aart’s musicianship outranks that of the Aussie.

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