EDA forecast hazy; execs say growth tied to IC recovery. (Design).

SUNNYVALE, CA -- The bumps in the EDA market will smooth over the next two years, a group of industry executives said in February. Growth will be tied to a recovery in semiconductors, the group told Electronic News.

Wally Rhines, chairman and CEO of Mentor Graphics, predicted 5% growth over the next year, assuming a recovery among EDA customers. Chip design will lag system design, he said.

Revenue and bookings will be fiat, said Cadence Design Systems president and chief executive Ray Bingham. Cadence's customers are optimistic "but ... forces that made [2002] difficult are still at large in the market." Tighter time-to-market budgets coupled with more-complex designs will mean a bigger role for EDA. CoWare president and CEO Alan Naumann concurred, telling EN that the enormous costs of new IC labs will lead to consolidation among IDMs and possibly IP sharing, with greater emphasis on chip software instead of hardware. "The rise of IP will change the game for customers and the EDA industry. We're moving from process-based to design to one in which the processor itself is a building block."

Nassda Corp. chief executive Sang Wang said a dip of minus 2% is possible this year but an IC recovery will drive 10-15% growth in 2004. Likewise, "until we see a recovery, the EDA industry will be tied to the cyclical nature of the semiconductor industry," asserted Jacques Benkoski, president and CEO, Monterey Design Systems, telling EN that IC growth will be slow in 2003. Yet he thinks Monterey will outpace the industry, guiding for 60% vs. a broader industry increase of 10%.

Synopsys Inc. chairman and CEO Aart De Geus didn't forecast a rise or fall, but instead cited various factors that could play a role including improved standards of living in India and China and increased 90 nm yields. "The value chain is being realigned," he was quoted as saying. "The good news is that in that value chain, EDA touches everything."