Desai has been one of the more skeptical EDA industry analysts for a long time, and his relationships with the major players have often been rocky. But sometimes he's right. In early 2001, when other analysts were predicting 12 to 15 percent EDA revenue growth, Desai had a lower figure that actually turned out to be optimistic.

Desai currently thinks that EDA sector fundamentals won't hit bottom until mid-2003. He thinks that a "deflationary environment" will help push a semiconductor industry recovery out to 2004, with semiconductor revenues going into yet another down year in 2003.

Desai last week issued "sell" ratings on Cadence, Synopsys and Mentor Graphics, in response to rising share prices. But what raised eyebrows the most was his initial "sell" rating on Synopsys, changed briefly to "hold" when Synopsys share prices fell.

Desai maintains that product bookings at both companies were declining before Synopsys acquired Avanti, that overly generous management stock options have caused a 40 percent dilution for shareholders and that revenue growth looks essentially flat in the 2002 and 2003 fiscal years. But most other analysts don't share these views, and several have "strong buy" ratings on the stock.

Steve Shevick, vice president for investor relations at Synopsys, said that Desai is "negative on the entire industry right now," but that his earlier upgrade to hold "recognized we will come out of the downturn in a very strong position."

Desai's current concern is that Synopsys' stated goal of $3.25 earnings per share will force deep job cuts. He has the same concern about Cadence, where he's looking for $1.2 billion in revenue next year, well below the company's target. Maintaining Cadence's $1/share earnings goal will also cause deep job cuts, Desai said.

Penny Herscher, executive vice president at Cadence, responded that her company "has no plans for across-the-board head count reduction."

Any analyst's opinion should be taken with a grain of salt. But Desai's contrarian views should at least spark some tough questions.