"We have begun a recovery," said Ray Bingham, president and CEO of Cadence Design Systems. "We know that because our customers are beginning to act like there is a recovery."

But the big question, said Bingham, is whether EDA companies continue to produce tools that allow customers to keep pace with Moore's Law and "do it in a way that makes those devices affordable and cheaper." Customers, said panelists, are changing the way they think about product development. "Moore's Law may be out of the grasp of devices that can't attract big markets," said Bingham.

"Something fundamentally changed in the last two years — cost has come in," said Synopsys Chairman and CEO Aart de Geus. "The economics and the technology are simultaneously at a breaking point. It is not just speed, area, and signal integrity; these things interact strongly."

"The big challenge is how do you make a big part, make it successfully and make it profitably," said Magma chairman and CEO Rajeev Madhavan. "When I first became an entrepreneur, it was all about clock frequency and performance. Today the opportunity seems to be how to reduce the cost of silicon."

Virage Logic CEO Adam Kablanian argued that costs have already won and Moore's Law is already broken. "For every successive generation of IC, the cost of design is increasing to the point where at 90nm it costs $30 million to design one project," said Kablanian. Other than DRAMs, MPUs, FPGAs and cell phone ASICs there aren't many products that can justify $30 million costs, he noted.

But Kablanian and other panelists said the EDA and IP industries can help by adding productivity and new technologies that link design closer to manufacturing. This reduces the overall costs, and thus the barrier to entry, for those considering implementing their designs on new process nodes.

De Geus disagreed that Moore's Law is broken. "Our industry loves complexity. It is clear the next generation of Moore's Law will happen and it will happen on time," said de Geus, noting that a collapse in yield at 130 nm and high cost of 90 nm presents new opportunities for the EDA industry.

"This is the very opportunity for our industry to start presenting a picture in which we own the concept of the economics of the entire flow," said de Geus. "Own in the terms of clarify it, highlight how it can be improved and then take action to do so."

Madhavan said that it will be imperative for the EDA industry to do its part to make Moore's Law "economically feasible." Madhavan and other panelists stressed that making Moore's Law economically feasible is not going to be done by cutting down the cost of tools, but by addressing new design problems and improving on persistently pesky problems.

Kathryn Kranen, president and CEO of Jasper Design Automation, said that customers today are not as concerned with design "reuse" as they are with "modifying" designs — adding differentiation to their ICs to feed the appetites of the new feature-hungry consumer electronics market. At the same time, products with new features must get to market faster.

Kranen said that even though verification has long been identified as the largest bottleneck in the design process, EDA has yet to really make vast improvements in the verification flow. Thus, said Kranen, verification is a key area for EDA growth.

Kranen and Madhavan predict 7 percent growth for the EDA industry. Bingham predicts Cadence will grow from 7 to 10 percent this year.

But Bingham noted Cadence is expecting a licensing renewal cycle to begin in the second half of the year. Other EDA companies may not have as significant a renewal cycle this year, but he said if the economy continues to pick up and the recover, returns that may help grow everyone in the EDA industry.

Mentor Graphics chairman and CEO Wally Rhines, who is also the current chairman of EDAC, said EDA industry has yet to feel the trickle-down effects from the semiconductor recovery. And in a tongue and cheek presentation, Rhines showed how for some reason the revenues of the photomask industry, when advanced 4 years, perfectly match the historical revenue trends of the EDA industry.

Rhines could offer no explanation why there is this correlation between photomask and EDA revenue trends, but noted that if the photomask revenue comparison holds true, EDA should begin its recovery in Q3 of this year.

Rhines predicts the EDA industry will see roughly 5 percent growth if there is no marked EDA recovery and 7 percent growth if there is a recovery. "I want all of you to go out and cheer for your local photomask producer to make it happen," said Rhines.