Friday, December 26, 2008

Rapidly growing local market bring new opportunities for EDA in India

Those following the EDA industry are well aware that its been an industry in some trouble right through this year.

If you visited EDA Consortium's web site, this becomes clear. In Q1-08, the global EDA industry revenue for Q1 2008 declined 1.2 percent to $1,350.7 million compared to $1,366.8 million in Q1 2007.

Later, the EDA industry revenue for Q2 2008 declined 3.7 percent to $1357.4 million compared to $1408.8 million in Q2 2007, as reported by the EDA Consortium.

I am still waiting to see how the Q3 results shape up. My guess is, it would be even lower than Q2, unless there are a few surprises!

The EDA market in India, as per the ISA F&S Report 2005, was US$110m. The latest figures are not yet available, though I would believe the Indian EDA industry is likely to do better than the global industry, unless, there have been some slowdown effects here as well.

I had an interesting discussion with Jaswinder Ahuja, Corporate Vice President and Managing Director, Cadence Design Systems (I) Pvt. Ltd and Chairman, India Semiconductor Association (ISA), on the (dipping?) fortunes of the EDA industry lately.

According to Ahuja, 2008 has been a challenging year. The global financial crisis has impacted several industries and the EDA industry was no exception. Due to the overall downturn in the economy, companies are being more cautious and are delaying purchase decisions, a move that is impacting the overall EDA industry.

Coming to the drivers for EDA in India this year, there are a few key ones! First, the design centres have gained expertise and are now doing cutting-edge designs out of India. They have moved up the value chain from doing block-level design to increasingly owning up end-to-end design and design starts.

Second, several Indian design services companies have made significant acquisitions, showing that their businesses have not just taken root, but also flourished. MindTree Consulting’s acquisition of TES PV and Wipro’s acquisition of Oki's wireless chip design arm are cases in point, added Ahuja.

He said: "The Indian EDA industry has been growing and we will see more technology adoptions and proliferations in India Design Centers. Also, the rapidly growing local market is unfolding new opportunities."

EDA outlook 2009
Going forward, market pressures and design complexities are just some of the issues design teams face today. Cadence's customers, for instance, would like to plan in the context of IP selection, run analysis around power, performance and cost perspectives. Design predictability will be a priority, said Ahuja.

The key focus areas for the EDA industry will be new design for manufacturing technologies as designs move to advanced nodes; verification and verification IPs and multicore processing support for EDA flows as a result of increased integration.

Also, SaaS is likely to gain traction as companies are compelled to consider flexible engagement models to access state-of-the art design environments that help design teams reduce risk and cost, yet increase time-to-productivity.

Are there any opportunities for EDA folks in solar? Ahuja disclosed that in a recent poll by ISA, to the question 'Solar PV has potential in India', almost 90 percent of respondents replied Agree or Strongly Agree.

With the worldwide focus on alternative energy systems, India has witnessed several companies announcing investments in PV segment. This is good news for the Indian semiconductor ecosystem.

Cadence has a broad portfolio of technologies that addresses the needs of different players in the ecosystem.

Low power initiatives
Low power has always been a key focus area in semiconductors. According to Ahuja, power efficient design is gaining importance across the design chain and EDA companies will have to look closely at 'green' technologies.

Energy efficiency at the system and application level for wired and wireless products will be one of the focus areas. Emerging technologies that allow applications and systems developers to evaluate how their programs use power both individually and in a dynamic, multi-application model of the end system will help expand the role of EDA into system-level design.

The Power Forward Initiative (PFI), an industry alliance comprising of companies across the semiconductor design chain will work towards a more systematic, integrated approach to low-power design.

Outlook 2009
With the new year about to start in less than a week's time, the impact of the financial crisis will see an increased demand for mid-range product technology as consumers shift spend toward 'essential', rather than 'desirable' electronic products.

As per Ahuja, globally, semiconductor companies are focusing on their core strengths, consolidating and realigning resources. Across sectors, they will look for systems that marry functionality with cost efficiencies.

"Growth for semiconductor companies will come from energy related and low-power technologies that are able to drive market share shifts," he noted.

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