The electronic design automation (EDA) industry has generally not shared in the semiconductor industry’s boom and needs to change from being only a provider of point tools to being a supplier of value-added services for all or part of the design process, EDA CEOs said last week.

Participating in an executive forum at the Design Automation Conference here, the CEOs also saw the industry continuing to advance its technology and finances through acquisitions and partnerships. Some also saw a gradual shift to PC platforms to some extent from the dominant Unix server platforms with the coming Microsoft shipment of Windows 95. The CEOs also believed EDA innovation was limited more by availability of talented people than research investment dollars.

The forum brought into contact the CEOs of the four largest companies: Joseph Costello of Cadence Design Systems; Aart de Geus of Synopsys; Alain Hanover of Viewlogic Systems, and Walden C. Rhines of Mentor Graphics, along with Gerald C. Hsu, CEO of start-up Arc-Sys, and Christine King and Wolfgang Ries, representatives of users IBM and Siemens, respectively. Ronald C. Collett, president of Collett International, was the forum’s chairman.

“There’s a lot more value that can be added by EDA companies if we start changing this model to get out of this point tool, CD-ROM sales mentality. I am not willing to get the same amount of money and work harder for it. I am not pleading poverty; we work our asses off and I don’t think we get much for it. That’s not poverty. We produce more value than we get credit for. I’m not a poverty kind of person,” he said, amid laughter.

“We should be being paid for the value that we provide the customer. To get to that kind of model, you’ve got to get out of the tool-selling phase. I think a fundamental issue is that we have been too focused on technology tools. Technology without process and the people and services to implement that change is the booby prize. It is not enough. We really don’t add any value to the customer base unless we’re changing people’s fundamental way of doing their business and doing their design,” he continued.

‘The way to make the pie bigger is to help us, the end-users and silicon suppliers…make more money. If you can help us make more money, we’re going to have more money to pay you guys.” She added: “As we get into the deep-submicron realm, the physical environment becomes more and more important.”

“It is (also) true that a greater percentage of revenue in the industry today is going for combinations of tools plus services toward integrated solutions providing creation of libraries and infrastructure. The start-ups in the industry, the smaller companies, have been about 50 percent or greater of revenues. For quite some time. they have served as an innovative tool that complements the large companies that typically are providing broader solutions.”

“The EDA industry is not rewarded by volume. It’s rewarded by number of designs. So there’s no direct tie between the success of a customer’s design results and the EDA company’s reward. So there’s lots of interest in trying to tie those two together better to the extent our customers are willing to do so. The profits of EDA are not up anywhere near as much as the profits of our customers. Any way we can tie our success to our customers’ success has got to be good. So we look for opportunities to write contracts, for example, that have incentive payments to us as certain goals are achieved and I think that’s a healthy direction in the industry. I think longer term if we can develop the kind of close relationship required to do leading-edge design, that more and more we’ll be seen as less of a threat” to customer design capability.