Are EDA tools a commodity?

I had the pleasure of attending the 20th International Conference on VLSI Design and 6th International Conference on Embedded Systems in Bangalore, and had the good fortune of meeting a range of top experts from these fields.

One panel discussion: "Are EDA technology/products becoming a commodity?", particularly caught my attention. Speakers debated on whether commoditization of EDA tools was happening with little/no differentiation toward project success.

Dr. Anand Anandkumar, managing director, Magma India, also a good friend, elucidated that the semiconductor design industry cannot do a complex SoC without EDA. And if there’s no EDA, there’s no integration. "If you are a commodity, you cannot solve problems!”

Now EDA is a key driver for semiconductor design companies to achieve objectives of building more and more complex (SoCs). However, the overall market size of EDA industry [estimated at US $4 billion] remains a fraction of the overall semiconductor market size [estimated at US $240 billion].

Dr Anandkumar added there had been various paradigm shifts and problems. The EDA industry was in a way the IP partner with the semiconductor industry. However, he agreed that parts of the tools had been commoditized. The EDA industry had become a prisoner of its own business model.

Nevertheless, newer things have been racing forward. There are also a variety of conflicting problems. Understanding those problems could be a way of handling and solving complex designs. The part of taking over risks had been completely absent. There was little ownership in sharing risks, which needed to change.

From the perspective of consumer electronics eco-system, available EDA technology is often viewed as not being in sync with the expectations and requirements of various design teams. Claims of productivity and quality of results advantages from EDA teams can seem more like wishful thinking than reality to end users.

More so, related issues of quality, inter-operability of standard formats, usability and understanding of designer needs are other areas of ongoing concern. These are not necessarily new issues, so what were EDA companies and their customers doing to address them? Has the EDA industry been getting its proportional value out of the semiconductor industry? Would love to hear from you.