EDA, an industry from Silicon Valley

Penny Aycinena asked me to write a short article in EDA confidential, which summarizes my concerns and hopes about innovation and start-ups. It is published today (June 30, 2008).

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Let me add more here:

The chapter of “Start-Up” which has been the least noticed is Chapter 6. It is one of my favourites though. It is about EDA, which stands for Electronic Design Automation. Today, no architect would design a complex building without software, nor would an automobile engineer. It is exactly the same with digital circuits.

Twenty five years ago, EDA was nearly non-existent. Forty years ago, chips were designed internally (and manually) at IBM, Motorola… and little by little, some new players emerged, tiny start-ups became big and an industry was born. It was more than $5B in revenues in 2007. The typical ebb and flow of start-up creation and acquisition went on for two decades. But since 2001, not much has happened: no IPO, small M&A deals and a few days ago, Cadence, the biggest EDA vendor, announced a hostile acquisition bid against Mentor, the number 3 player. Both companies were founded in the 80s.

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EDA is a good illustration of what Silicon Valley is: a rich network of individuals, academics, entrepreneurs, investors. What is interesting about EDA is that its center is probably Berkeley (rather than Stanford or Sand Hill Road) as the picture below shows. Let me quote again two legends of the EDA field, two recipients of the Kaufman award, the Nobel Prize of EDA:

– “Risk taking in EDA is gone.” Joe Costello

– “If there is a single point I wish to make here today, it is that as a discipline, both in industry and in academia, we are just not taking enough risks today.” Richard Newton

It could be that the maturity of EDA and of Silicon Valley is not such a good sign.

 

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3 thoughts on “EDA, an industry from Silicon Valley

  1. herve

    Well It seems the EDA industry is really suffering and not attarcing much VC money. I still love the area, though I am not an expert and I have the feeling there are opportunities. Newton was right about taking risks, and it could be the industry is at crossroads, so that a new Magma is needed to shake EDA…

    Reply
  2. Martin

    Hi,

    I came upon your site as I was surveying around looking for firms that have spun-off from Synopys.

    I am writing a chapter on the history of UCB EE&CS Department spin-offs for a book on the role of UC departments in regional development. One part of this is to examine direct spin-offs from UCB and then to catalog the spin-offs of these spin-offs. I came across your Synopys Family Tree and was trying to interpret it, so that I could enter it into a database.

    I plan to do the same thing for Cadence as it was also a spin-off through Solomon Design Associates.

    I have just ordered your book and can’t wait to read it.

    Thanks for posting some of your work. I will be happy to cite it.

    Reply

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