The industry continues to feel a few ripples from Cadence's acquisition of Clearshape. After having heard from Blaze DFM immediately after Cadence's official release of the news, I have now heard from Ponte Solutions. Jim Hogan, veteran EDA investor and Chairman of the Board of Ponte, observed that "The major foundries have stated that Litho, CMP, and Critical Area Analysis are at the core of their DFM strategies starting at 65nm and smaller geometries. Designers will continue to ask their major design flow providers to add these key elements to their overall solution. The recent purchase of Clearshape being one example of such an augmentation." I agree that Cadence responded to market demands and I am sure those demands originated from one or more of its key customers.
In my view Alex Alexanian, Ponte's President and CEO, shed more light on the approach that his company wants to follow in this market. He said: "Cadence's purchase of Clearshape reinforces the value DFM offerings that are supported by the major foundries and key customers bring to design flows as the industry moves beyond 65nm. Providing design teams the ability to trade-off DFM impacts vs. other classic design cost elements such as speed and timing will be critical going forward. The question to design teams is do they want best in class DFM solutions to be tied to a single flow or to be independent so they can be used with all major design offerings?" Thus it seems that, as far as Cadence's customers are concerned, Ponte will use OpenAccess as a critical tool to provide an alternative to the flow provided by Cadence's integration of Clearshape tools into its proprietary system.
Michael Buehler-Garcia, Vice President of Marketing and Business Development at Ponte Solutions echoed the view expressed by his CEO. He reiterated that "This acquisition of Clearshape by Cadence is in concert with Ponte's view that DFM elements need to be tied to the design cockpits of a flow in order to provide users with a complete solution. You can either provide this via an aggressive use of open interface standards and partnership programs, or by being acquired into a major flow."
Since I have no reason to doubt the technical capabilities of OpenAccess to support a DFM flow that includes third party tools, I have to conclude that the motivation for Cadence to purchase Clearshape was solely motivated by business reasons and in particular the viability of Clearshape as a stand alone company. System houses have integrated tools from various vendors since shortly after the birth of the EDA industry, so the integration work required was certainly not the key reason to "suggest" the purchase to Cadence. After all, such a purchase would also make it more difficult and expensive for Cadence's customers to choose another DFM solution should a third party offering prove to be better in the future.
Therefore I come to the conclusion that the DFM market is smaller and less robust than some of its participant think or are willing to admit to the point that design companies that see DFM as a critical method to successful silicon at or below 65 nm process nodes, want to be assured of the financial stability of a tool provider not just now, but a few years from now. At the moment it looks like there is room for only two or three independent providers of DFM tools, since the market, with the passing of months, seems closer to a sustainable size around $200 million than to the $750 million once talked about.
When you couple this with financial markets liquidity problems, not easily fixed given the existing inflationary trends in the consumers market, it is difficult, if not foolhardy, to predict the availability of investment funds approaching what we saw during the .com era. Unfortunately only this type of investment environment would sustain a public offering by EDA companies contemplating a TAM around $50 million or so, which is realistically the size any independent DFM company can expect.