A couple of months before the start of DAC I promised myself that I would find time to attend some of the technical program sessions. Then, the phone calls from marketing and public relations people begun, and next thing I knew, my time was all booked up with interviews, booth visits, and meetings with senior executives and financial analysts. The latter meetings are a peculiarity of mine. In addition to my technical degree, I also have a degree in Business Administration and Economics, and during my career as an executive at various EDA companies I acquired an appreciation for the economics side of the industry.

My "take-aways" from this year's event can be summarized by stating that the industry is at both a technical and a financial inflexion point. Some of what went on around DAC has made me think that the next year or two will require decisions that have the potential of reshaping the EDA industry.

The Conference

Organizers can declare themselves satisfied with the outcome. The number of attendees was down from previous years, the reported preliminary total was 6001, but an overwhelming number of exhibitors stated that the quality of their leads was very good. Less visitors, but more qualified visitors. Those who came wanted to be there. A more telling figure of the recession and the diminishing funds for academic research is the number of full conference attendees. This number has been steadily decreasing every year, at least since 2006, regardless of the location of the conference, and this year the number was 1554. Still respectable but almost half the number of registrant in the same category in 2006.

The lack of support by the industry of traditional communication channels was also evident at DAC. In an effort to save money, many companies now rely on "social media" channels to deliver their message. DAC tried to address the divergence between professional journalists and bloggers by having two different areas dedicated to them. In addition to the traditional Press Room and interviews area, there was an area on the exhibit floor dedicated to bloggers. I am not sure how successful it was, although it looked attractive. The number of journalists attending DAC continues to decrease. Attendance from both US based professionals and international reporters was less than last year. The lack of professional attendance made the Press Room seem underutilized.

The Financial Stuff

I do not have the official number of financial analysts attendees, but it seemed to me that there were a few less than in previous years. Richard Valera, of Needham and Company, issued a report on his finding at DAC. In his summary he stated: " We attended the 47th annual Design Automation Conference in Anaheim, California this week. Not surprisingly, the tone of the show was meaningfully improved from last year. Much of the buzz/chatter on the floor was around the recent M&A activity in the space--especially the Virage (VIRL, Hold) and Denali transactions-and what the implications might be for other smaller EDA and IP companies. Another popular topic was Carl Icahn's recent involvement with Mentor Graphics (MENT, Buy), as some speculated whether it might be a catalyst for some form of restructuring or M&A with Mentor or the industry. Overall, while we gleaned plenty of interesting information at the show, our opinions and ratings remain unchanged."

I agree that Synopsys two acquisitions just before DAC, Virage Logic and Synfora, were topics of discussion. In my opinion, the Virage Logic acquisition is in part a reaction to the acquisition by Cadence of Denali. Synopsys sees itself as the provider of all things required to produce an IC, and the amount of memory blocks used by designers is increasing. The rest of the IP obtained from the acquisition is less important to Synopsys. How it will manage it and how it will integrate some of the IP into its DesignWare line will be telling. In particular, is there a future for the ARC processor? The Denali deal, instead, is specifically focused on memory: both IP and tools. Some analysts question the amount paid by Cadence stating that it was too high. But they forget that Denali was the leading privately funded company in EDA. That it had one year's worth of revenue in cash. That it was very profitable, and that is was the recognized leader in memory IP. Denali seamlessly complements the existing offerings by Cadence in the IP market.

Synoposys' acquisition of the Synfora assets diminishes the probability that a small company in the same market will now be acquired. In particular Forte's Cynthesizer may now face increased competition if Synopsys is successful in integrating the Synphony C compiler technology into its own flow. There is no doubt in my mind that the technology acquisition has strengthened Synopsys presence in the ESL market.

As far as the Mentor Graphics situation is concerned, I think that the company will benefit from a discussion with Carl Icahn. To me Mentor corporate structure seems to have redundant functionalities scattered among the operational divisions. Its operating mode also looks like it favors divisional success at the potential expense of corporate success. The latter is seen as a natural derivative of divisional success, but the result is that Mentor looks at times as a conglomerate of smaller specialized companies whose mission can be explained in far easier terms than explaining the corporate mission. Mentor continues to make good progress technologically, with the majority of its products judged to be very competitive. It seems that Carl Icahn is thinking that the company is under performing not because it is loosing its technological edge, but because it needs to evolve its corporate structure.

EDA360

John Bruggeman of Cadence continued his mission to explain his EDA360 document to the industry. It was one of the subjects discussed by attendees and the opinions ranged from "We had that idea ten years ago but nobody paid attention" to "It is just marketing hype". The truth, of course is in the middle. The message is clear, at least to me. The industry must expand its market and change its way of doing business if it wants to grow. It is not a matter of survival: that is assured. But it is a matter of reaping returns commensurate to the contributions the industry makes to the semiconductor and systems industries.

It is true that the document does not contain a road map, or even specifics of how such a strategy can be implemented. These are company proprietary matters with high competitive value. Cadence would be foolish to disclose them. In my opinion the major message given is "it's the system, stupid", same thing I have said in various venues a number of times. What Bruggeman adds is the notion that applications, or "Apps" as Apple likes to call them, are key elements of a system and have significant commercial value. Whether an application takes the form of firmware, software, or hardware, is immaterial. But if the EDA industry can find a way to be part of this aftermarket, it will have found a significant way to expand its revenues.

Formal Methods

During DAC I wrote that Formal Verification is a misnomer and that the market segment should be called Formal Methods. At the same time, and quite independent from each other, Gary Smith during his opening remarks in the DAC Pavilion stated that designers should be using formal analysis tools during the design phase.

Formal Verification tools can be divided into two classes: equivalence checking and formal analysis. Equivalence checking used to be much more useful when some type of manual transformation was necessary to proceed from one abstraction level to another in the same design. This requirement is becoming rare as tools are now available to proceed from one abstraction level to the next. Even at the circuit level it is less common to make manual changes, since the complexities and numbers of design rules make such attempts very risky.

Thus equivalence checking is very useful for tools developers as part of the quality assurance process when they develop synthesis tools, for example. For tools users equivalence checking is a way to prove that the tool they are using is trustworthy. In this case, again, it is mostly a matter of quality assurance, not development.

Formal analysis, though, has been introduced as a verification method, while instead it should be a design method. It should be used as a step to indicate the design intent that represents the designer interpretation of a specification. If marketed this way, these tools would have a much larger TAM (total available market) and a faster acceptance phase. Writing assertions before developing the code is a much more structured way to develop a product, then going about verifying the implementation by inserting assertions afterwards.

You Don't Know Jack

This is the tile of a panel held in the DAC Pavilion in the last couple of years. The panel is becoming a regular occurrence at every DAC. The panelists are high school seniors, this year two girls and two boys, who contribute their experiences on the use of electronic products. It was expertly moderated by Kathryn Kranen, CEO of Jasper Design Automation. It was very interesting to hear how they use their laptops and their dislike for towers and desktops (you cannot take them with you). The only exception is serious gaming, where the power of advanced graphics cards in desktops is of great benefit. But more interesting was the way they use their phone. First of all they are on almost continuously, even when driving or in class, but the phone is used almost exclusively as a texting device, not as an oral form of communication. The laptops are used for social interactions, with most of them having a number of networks of friends. They are very aware of the threats to privacy on the net. The real surprising answer was their unequivocal and unanimous dislike for the iPAD. The reason: "It does not do anything I cannot do on my laptop or my phone, and besides, I cannot play games on it." Is the iPAD destined to become a fashion accessory for the over thirty?

The Volcano Is Awake

Magma Design Automation was also singled out by Gary Smith as a company to watch during this year's DAC. Left for almost dead a couple of years ago by its competitors, the company has recovered through both financial and technological skills. Its balance sheet now looks healthy, and its products offerings are very competitive and gaining market share. Its presence in the analog/mixed signal markets is increasing, and the introduction of Tekton, a timing analysis tool based on completely new architecture and algorithms, is now considered a worthy alternative to Synopsys PrimeTime, long the de facto standard tool in this sector. So much so that Synopsy found it necessary to release a new version of PrimeTime just before DAC that offers some of the functionality of Tekton but built on the same architecture of the original PrimeTime.

In addition the acquisition of Sabio Labs two years ago is also beginning to bring fruits. Sabio Labs was the creation of Mar Hershenson a pioneer of analog IP creation and this year's winner of the Marie R. Pistilli award. The integration of the Sabio Lab technology with the Titan family of tools is giving results that allow the company to offer a complete spectrum of solutions to analog design problems.

Magma's booth at DAC, although situated in the periphery of the floor, was always crowded every time I went by, and Bob Smith, Vice president of Product Marketing declared himself satisfied with the quality of leads collected at the show.

An Interesting Startup

General attempts to lower power consumption in digital design have focused on power distribution and mechanisms to shut off unused circuits. A new French company headquartered in Grenoble, has a different idea. Tiempo founders say that asynchronous circuits use less power than synchronous ones, since they operate only when needed, not every clock cycle as synchronous circuits do. The problem had been how to convert synchronous design into asynchronous circuits. They have solved the problem and they came to DAC as exhibitors for the first time this year.

Tiempo CEO is Serge Maginot a veteran EDA technologist, and he has assembled a strong R&D team and an impressive group of investors, especially for a European company. I believe their technology is sound, and hopefully they will be able to match it with an effective marketing organization, something that too often is lacking in European companies.

Final Thoughts

Overall a good DAC worth attending. Next year it is back to San Francisco were at least Free Monday, if there will be such a thing, will be much more crowded than in Anaheim. How well will it do depends a lot on the financial health of the world. The signs are, unfortunately, not encouraging. Contrary to what a famous book says greed is not good.


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-- Gabe Moretti, EDACafe.com Contributing Editor.