January 06, 2003
Venturing Capital into EDA
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Running with the best of them
Boards of CoWare and Tensilica. For an industry as sensitive to the nuances and psyche of the investment community, it's useful to check in with Schuh as a seasoned and articulate observer.
Mike can tick off on one hand the principles by which he judges the potential success of an EDA start-up. The list starts with market opportunity. He says the market for design automation is small - say, a hundred-thousand-plus designers world wide - but each designer needs upwards of a couple million dollars worth of software to execute a design. The market opportunity is there, but needs careful consideration.
Next on the list is the intellectual property of the potential company as a basis for competition. Like many, Schuh says that if you've got an algorithm that's patentable, a clean data model, a serviceable user interface, an expandable domain, and a dozen or so PhD's to drive the thing - you're on your way to having the kernel of an EDA start-up.
completely new company, should the investment community step up and fund the start-up. Parenthetically, Schuh says an EDA tool is a software application - the companies who develop and sell them need to remember that mixing a service dimension into their business model can confuse the issue.
Fourth on the list is the all-important Team Factor. The early-stage company is usually populated by people who are “mad as hell” and want to solve a problem that they've seen as both troubling and ubiquitous. They bring passion and intelligence to the enterprise, but often need significant amounts of business savvy and counsel from their investors. That's a role that Schuh sees as a crucial one for someone like himself.
enterprise. Companies and VCs alike have learned from “the egregious investment errors” of the last few years and returned to sound fundamentals, he says. They now openly acknowledge that “nothing is worse than going public too soon.”
He says fledgling EDA companies need to stay focused and cognizant at all times of several underlying principles. What is the pain you're addressing and what are people willing to pay to take that pain away? What is the sales cycle for your product line - are you allowing for an average sales cycle of 6 months or more? And as you move to market, when you begin to turn the crank and produce product, will enough business come your way to move towards profitability?
Cadence Design Systems, Inc. announced that Faraday Technology Corp. has selected Cadence First Encounter Ultra for physical prototyping of its system on-a-chip (SoC) designs. Faraday design engineers will employ a "continuous convergence" design methodology, using First Encounter Ultra to generate and refine a virtual prototype of the physical design, obtaining feedback on chip performance and a functional, physically layout down to the wire level including die size, power, timing, module partitioning and placement, routing, and signal integrity detail.
The EDA IAP (EDA Integration Alliance Partners) announced that e*ECAD is the recipient of the 2002 1st Annual Flow Resource Provider Award. The award was created to promote engine independent flow development for both ASIC and SoC design flows. All current IAP members were considered and e*ECAD was selected based upon its independent offering of EDA tools from nearly 15 vendors.
Teradyne Inc. announced that National Semiconductor Corp. has purchased a Catalyst Tiger test system for characterization and multi-site production test of SoC devices with multi-Giga-bit interfaces. The Tiger system extends the Catalyst Family by providing at-speed testing for a variety of devices, accommodating up to 1024 digital pins and combining analog test capability, timing flexibility, and programmable speed. The system meets the speed and repeatability requirements for National's next generation high-speed communications devices.
Tower Semiconductor has enhanced its Fab 2 IP portfolio by licensing industry-standard design platforms from Artisan Components, Inc. As part of the agreement, Artisan will deliver a suite of memory generators for single- and dual-port SRAM, the SAGE-X standard cell library, and a complete set of general-purpose I/Os optimized for Tower's 0.18-micron CMOS process. These platforms will be available to Tower customers as early as the first quarter of 2003.
UMC and Xilinx, Inc. reported that the companies are on track to produce a new family of Xilinx programmable chips in the second half of 2003 using UMC's 90-nanometer chip-making process technology. UMC is preparing to manufacture the line of Xilinx FPGAs at its 300mm fab and has already produced an FPGA test chip. UMC's L90 process integrates nine layers of high-speed copper interconnect, 1.2V high-performance transistors, and low-k dielectric material into a single manufacturing process. Xilinx's investment with UMC in 90-nanometer manufacturing technology should allow the company to drive pricing down to under $25 for a 1-million-gate FPGA (approximately 17,000 logic cells).
Coming soon to a theater near you
Consumer Electronics Show - Even by Las Vegas' standard, CES is gigantic. Last year, over 100,000 attendees rolled into town to check out the “latest and greatest” in consumer electronics. Hosted by the Consumer Electronics Association (CEA) - an industry consortium of over 1000 companies - CES is North America's largest technology tradeshow and by some reports, the largest show of any kind. This year CES showcases 2,000 international exhibitors in wireless communications, gaming, digital video, extreme audio, accessories, CE fashion, consumer technology networking, broadband, mobile electronics, content media, delivery systems, new business technology, and the Internet.
Keynoters include Microsoft Chairman Bill Gates, Intel CEO Craig Barrett, Sony COO Kunitake Ando, Texas Instruments Chairman, President and CEO Tom Engibous, Dell Computer CEO Michael Dell, and Cingular Wireless President and CEO Stephen Carter. The six SuperSessions will include The Next Big Things in Consumer Electronics, The Future of Consumer Technology, Gaming, Wireless, Digital Download, and the Last Gadget Standing. It's exhausting just to think of it all - but, if get there you must, then hurry! The show is running this week from January 9th to the 12th.
You can find the full EDACafe event calendar here.
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-- Peggy Aycinena, EDACafe.com Contributing Editor.
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