February 23, 2009
Bee in the Bonnet, Bug on the Loose
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There’s lots of opportunity for growth and expansion in the EDA industry. Having said that, there’s also lots of opportunity for gloom. Cadence’s
Chi-Ping Hsu nixes the gloom opportunity, however, in
a blog posted on the company’s site. He says the industry just needs to stay “razor focused” on the problems of the customers and things will work out. I think that’s too vague.
Instead, let’s consider four specific expansion opportunities. First, there’s everything biological – CAD tools for protein design, for neuron/semiconductor interface development, and for labs-on-chip. We’ve just begun to scratch the surface here.
Second, there’s the whole world of nano-everything – in particular, using novel, carbon-based devices to create compute platforms. Too sci-fi for you down-to-earth EDA types? How sci-fi is it that Intel was talking up a 2.3-billion transistor chip at
ISSCC in San Francisco earlier this month? Have a little imagination.
Third, there’s reducing the barrier to access for EDA tools.
Harry Gries is organizing a roundtable on Wednesday evening, February 25th, at
DVCon in San Jose to talk about just such stuff – Cloud Computing and SaaS models, “making EDA tools easier to distribute, access, use, scale, and support to make them more affordable for smaller startups and design services companies.” Admirable goals. Lots of opportunities.
Editor’s Note: Also at DVCon, don’t miss the
Finally, there’s the whole multicore/parallel programming problema. And what a problema that is! My conversation below is with Professor Parallel himself, U.C. Berkeley’s
Dave Patterson. We talk about the problems of multicore, the promise of multicore, and the pain of resolving the former to realize the latter.
Meanwhile, at this writing the market is down at a level we ain’t seen since October 2002. How gloomy is that? Pretty gloomy – even for those who are “razor-focused” on the future.
And, how is EDA faring in the current economy? Well, SNPS is right on track, selling today at just about what it was selling at in October 2002. MENT is down about 40% from where it sat in October 2002, CDNS is down 60%, and LAVA is down more than 80%.
One question that could be asked given these stats: Why has SNPS maintained its value over the last 6+ years? And, why has it maintained (a semblance of) value over the last brutal 6 months? I’ll be talking to Synopsys CEO
Aart de Geus next month here in
EDA Weekly, and we’ll address that question. We’ll also find out if Synopsys is looking at any of the EDA expansion opportunities I've listed above.
It’s none of your business …
If you’re a publicly traded EDA company, chances are your recent earnings announcements have not been pretty – unless you’re SNPS, of course. If you’re privately held, however, the numbers only go from good to great. Go figure.
Cadence reported fourth quarter 2008 revenue of $227 million, compared to revenue of $458 million reported for the same period in 2007. On a GAAP basis, Cadence recognized a net loss of $1.64 billion, or $(6.57) per share on a diluted basis, in the fourth quarter of 2008, compared to net income of $120 million, or $0.41 per share on a diluted basis in the same period in 2007. Ouch.
Carbon Design Systems announced their 2008 calendar year ushered in 27 new customers in “major market segments worldwide” and year-over-year growth of 87%, including Q4 revenue growth of 108% over the same period last year.
ClioSoft, Inc. announced it ended its 2008 financial year with a 51% growth in bookings over 2007.
CoFluent Design announced it has doubled its customer base during 2008, “due to the strong technical leadership of CoFluent Studio and a growing market need for virtual system technology.”
EVE announced calendar year 2008 produced year-to-year growth in excess of 30%.
Forte Design Systems announced “record revenue and bookings” for 2008, including Q4 sales growth of 30%.
Jasper Design announced a $7 million Round D influx of cash from
ZenShin Capital, who are now part of a team that includes
Accel Partners, Cambrian Ventures, Foundation Capital,
Magma Design announced a 17% workforce layoff, plus salary cuts and facilities consolidation worldwide. Don’t expect champagne and caviar to be served up during the Magma investor call on February 26th.
Mentor Graphics will also be talking to The Street on their Q4 2008 earning call, in the hour just after Magma’s call on February 26th. Given Mentor’s predicted earnings for 2009, don’t look for any champagne and/or caviar on that call either. It may be interesting to see if the call is executed using VoIP, however. Mentor’s received some nice press recently for saving on their phone bills using the latest in Internet technology.
Synopsys reported results for its first quarter ended January 31, 2009. For the first quarter of fiscal 2009, Synopsys reported revenue of $339.8 million, a 7.7% increase compared to $315.5 million for the first quarter of fiscal 2008.
Dave Burrow and Agility …
I spoke briefly by phone today with
Dave Burrow, CEO of Agility, which has closed its doors. Burrow confirmed: “Agility sold the assets it bought from Celoxica to Mentor Graphics, and the assets for going from Matlab to C were sold to The MathWorks.”
As far as the future of EDA is concerned, he said, “I think the biggest problem for EDA is that it’s tough to raise money in this economic climate. [Meanwhile], the issues that Cadence and Magma are having, which are different for each company, make even the normal process of assimilating small companies into larger companies even more difficult than in the past. This process [continues] to take place, but the valuations are weak. Of course, Mentor, Synopsys, MathWorks are strong and will view this time as an opportunity to bring new technology, new products, and new customers into their portfolios.”
The real question is, what will happen to the R&D budgets when customers are being more cautious? I don’t have a crystal ball, but if you look at data that Wally Rhines has presented in the past, for instance, that electronic design lags the economy by some number of months – if that patterns continues, things will be weak for a while.”
Does Burrow think these are good times, nonetheless, for students to consider careers in EDA? He said, “Design problems, in general, are still good opportunities for grad students, but whether they’ll be addressing those problems in EDA companies or in larger electronics companies, I don’t know. The geographic distribution of those jobs is also an issue. Will all of the jobs be in Silicon Valley, or even in the U.S.? These are good questions to ask, with no easy answers.”
But I do believe technology is still going to be part of the solution – for energy and for making the world more efficient. The mix of the products may change, but we’ll see more technology applied to health care, to transportation, to communication – especially outside the U.S.”
You just have to remain bullish about technology. The trick is to know where, in which domain, and in which geography the real growth activity will continue. Things always change with time, but the continued role of electronics in the evolution of our society is something you just can’t be negative about.”
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-- Peggy Aycinena, EDACafe.com Contributing Editor.
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