EDA chiefs debate getting bigger slice of the pie

SAN FRANCISCO—The age-old question of whether EDA gets its fair share of semiconductor ecosystem revenue reared its head at a panel discussion involving the CEOs of EDA's three largest companies at the Design Automation Conference here Monday (July 27), with at least one suggesting that the current recession may be the catalyst for a favorable change.

EDA revenue has consistently been about 2 percent of semiconductor industry revenue throughout much of the industry's history. But many believe it should be higher. Price wars and other factors have combined to leave EDA shortchanged, they argue.

Aart de Geus, chairman and CEO of Synopsys Inc., said that only economic pressure—such as that being exerted by the current recession—can change the status quo. If EDA tools can help alleviate chip makers economic pain by enabling more efficient design, they may be able to command a higher percentage of revenue, he said.

The "economic downturn right now is our best opportunity to shake things up," de Geus said in a discussion of EDA's potential for helping bring about changes in energy consumption and the development of alternative energies.

Aart de Geus Chairman and CEO, Synopsys Inc.

But de Geus also suggested that the question of whether EDA was being fairly compensated was pointless. "There is no industry in the world that doesn't feel that they don't get their fair share," he said.

Walden Rhines, chairman and CEO of Mentor Graphics Corp., said he doesn't see EDA commanding a higher portion of semiconductor industry revenue anytime soon. "The easier way is to grow semiconductor revenue and get more that way," he said.

Rhines also said EDA could derive greater revenue from adjacent industries, including the military/aerospace and automotive industries. "These industries are really in their infancy in terms of using automation," he said.