Cadence Design Systems Inc. today will launch an initiative in Internet design, unveiling what it has dubbed the "Gateway to the New Electronics Supply Chain," a Web portal built around the exchange of electronic design data among component makers, OEMs, and contract electronics manufacturers.
The portal-an independent company that's part of the iCadence initiative-will link EDA tool and service provider Cadence Design Systems, computer maker Hewlett-Packard, and contract electronics manufacturer Flextronics in a business-to-business trading hub aimed at accelerating the design and procurement of printed-circuit boards.
Cadence, San Jose, will be the major shareholder in the new venture. It will be open to other component, system, and EDA vendors as well as other CEMs. The EDA tool maker will leverage its role as a key player in the design-services and PCB-design industries by offering new software and services that will expedite the transfer of critical design data into supply-chain management systems in the early stages of the procurement process.
"The driving force and the common theme behind this initiative is efficiency. OEMs need to communicate with component suppliers and contract electronics manufacturers, and printed-circuit-board designers have to communicate with each other," said David DeMaria, senior vice president of worldwide marketing at Cadence, in an interview here last week at the Design Automation and Test Equipment conference.
DeMaria, who declined to reveal the name of the new equity-based joint venture, compared the new PCB supply-chain management portal to the recent purchasing portal formed by Oracle and the major automakers in Detroit.
"Cadence owns most of the PCB-design desktop," DeMaria noted, referring to Cadence's market dominance as a CAD tool supplier, which it gained, in part, through last year's acquisition of Orcad, a leading maker of board-design software for the PC.
Cadence is developing special software that will convert CAD tool data into a bill of materials for CEMs that can be sent over the Internet, thus accelerating the manufacturing cycle and "speeding time-to-market," DeMaria said.
The new trading hub is aligned along the popular dot-com "market maker" business model that brings buyers and sellers together in an online trading environment designed to streamline procurement.
This model is used by component-procurement hubs such as ChipCenter.com and PartMiner.com, which link component buyers with component sources in a Web-based information hub organized around the exchange of component description, availability, and pricing data.
The iCadence trading portal uses a similar learn/find/buy transaction model, but introduces into the process complex data collected during board-design capture, board layout, and circuit routing.
The potential for such trading sites is huge, industry watchers say. According to Forrester Research Inc., Cambridge, Mass., the online business-to-business market for the electronics industry is the world's largest. Forrester estimates the market to be valued this year at $230 billion, growing to approximately $600 billion in 2004.
The new PCB trading portal will be the first of several such portals on the drawing board, according to Cadence. Hubs for system design and a hub linking makers of silicon intellectual property and foundries are also planned.
Cadence isn't the first company to link buyers and manufacturers of PCBs in a vertical business-to-business purchasing portal.
In a related but separate move last week, SiliconX Inc. announced its development plans and field testing of an early version of its Web site (www.siliconx.com), which is aimed at creating a central online location for the entire IC design and manufacturing supply chain.
More directly aimed at the PCB sector, WebQuote.com offers automated, online RFQ generators and other buyer/seller connection services. The new Cadence company, however, is the first equity partnership linking an EDA supplier with component makers and a CEM.
To date, there has not been a tight link between the electronics supply chain and the EDA industry, despite the fact that design engineers make or influence most purchasing decisions when they make design determinations.
Cadence will reportedly fold its activeparts.com component-library concept into the portal by offering free EDA software and models (from OrCAD's operation in India), with the new company having a revenue model based on component sales.
Activeparts is used in conjunction with PCB-design packages and links design-component information to manufacturers' databases.
Richard Wallace is the former editor-in-chief of EE Times-EBN's sister publication-and is editorial director of CMP's Electronics Group.