The EDA industry has recently undergone a total upheaval, many companies making major changes in internal structure and strategy. The ASIC industry and the foundries will have to address a complete retooling while also looking at ways to get more of the new designs into production. The advent of the 180 nm and smaller processes has both enabled and driven extremely large ICs, with gate counts well in excess of 10 million. Examples of the functionality possible include the G2.5 cell phones with Internet capabilities and the Sega Dreamcast video game console with a 128-bit graphics machine. At the same time, the gargantuan ICs challenge the best of the current generation tools and methodologies.

So what should we plan to see in the coming year? Continued consolidation and a continuing explosion in start-up companies. The large EDA firms will continue to buy the smaller companies. New companies will sprout up to address needs not well handled by their larger brethren, and the medium-sized companies will continue to struggle for attention and market share. The larger companies will continue to provide most of the people in EDA. The point tools will continue to proliferate, but the finalization and adoption of the newer interoperability standards will enable much better tool interactions, possibly even simplifying some design tasks.

In the semiconductor area, even more dramatic changes will occur. The large companies like Motorola and TI are in the process of moving some of their production to outside foundries. The Taiwanese foundries have gotten over the earthquake and are starting to move on to the 300-mm wafers and 0.15-ým processes. The fact that the combination of large wafers and very small geometries is viable only for either very high volume production of moderately sized dice, or for intermediate volumes of very large dice, means that the foundries must more aggressively pursue new business. The new wafer fabs will cost somewhere in the $2 billion range, a total that makes even large companies like IBM queasy. The foundries will have to move from a pure manufacturing strategy to one where they help their customers acquire and use (or reuse) cores and megafunctions, blurring the boundaries between ASIC and foundry. The unacceptable alternative for the wafer fabs is to have the facility sit partially idle, at a cost of over $2 million a dayýand thatýs just the depreciation.

The main driver for the products to fill these manufacturing behemoths wonýt be the PC and its components, but instead communications and consumer products. The Internetýs insatiable demand for bandwidth will drive developments in broadband communications. The desire for anytime, anywhere connectivity in all modes moves more data streams into the former voice-only channels, and drives the switches and routers to greater flexibility and adaptability. The question of getting bandwidth to the home userýs curb may have been finessed by the advent of DSLs and cable modems, which can supply much more full-time bandwidth than even a dedicated T-1 line can. Full-time, high-speed connections turn the house into another network. Even consumer audio and video equipment become part of the network, by incorporating features like Sonyýs I-link (IEEE 1394) interfaces into the products so you can have your movies follow you around the house.

This connectivity even extends into your car, with GPS and intelligent highway infrastructure that helps you get around traffic jams and can also locateýthrough electronic yellow pagesýthe nearest take-out joint so you can bring home the hot dinner you didnýt have time to make because of the traffic. The growth in the smart systems will incorporate more embedded computing systems, which in turn will keep the existing computer component businesses alive and well.

The various industry analysts and associations are predicting double-digit growth for the semiconductor industry for the next two years and the EDA companies should grow at something near their historical 17-percent rate over the same time frame. The highly favorable prospects for all the companies puts increasing pressure on the job market, making the shortage of highly-skilled technical workers ever more intense. As they said at this yearýs DAC, let the good times roll!