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Measuring the stability of EDA vendors

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pitch monk
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re: Measuring the stability of EDA vendors
pitch monk   1/6/2009 8:10:39 PM
Gabe, You hit the nail on the head. There are many signs that EDA market is not viable anymore. Let me try a different angle: (1) The original "buyers" have moved on from their roles. In my view, the buyer pool has shrunk dramatically. (No or very low demand) (2) VC $ have dried up for EDA in the last few years. As a result, there is very little innovation. You can hardly find new EDA companies nowadays. Even if VC $ start flowing again, it will take atleast two years before we see new technologies in the market (Very low supply). (3) Pricing structures are still very shaky. Designers can get hold of tools from any vendor at 10% the list price (meaning 90% discount). This is what you are seeing in terms of efficiency. Competition amongst the players is forcing intense price pressure. This is not going to change even if Magma bows out, because Mentor has joined the fray. (4) Even though there are no substitutes for EDA, designers are covering themselves by buying tools for next few years in advance. Even if they design in 65nm, they want 45nm features. As a result, the features for advanced node get subsidized even more. I think EDA will be in turmoil for the next 2-3 years.

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