16 November 2011

Emulation is Going to make a Comeback!

After a period of slump, the EDA industry is back to its feet. The Semiconductor industry itself has witnessed quite a change, thanks to the shift in focus post recession. During a recent visit to India, Dr. Walden C Rhines, Chairman & CEO, Mentor Graphics. & Hanns Windele, Vice President - Europe & India, Mentor Graphics talked to SmartTechie in an exclusive interview about the changing industry, the new trends and what EDA players need to look out for in coming days.

 How has the market been for EDA industry, especially Mentor Graphics?

At Mentor Graphics, we had a fantastic year in 2010, and this year looks equally terrific although there has been some weakness in the second quarter due to the shortage of parts caused by the Japanese earth quake. Most people are forecasting that the longing will be made up during the year but some manufacturers are getting a little skeptical that the second half for it not being as strong as they thought. Overall the earning in general has been good. Recently several companies including Apple have announced outstanding results. We may not have a strong second half as some are hoping, yet it seems to have a reasonable single digit growth year. We recently announced our first quarter results and over all the Electronic Design Automation (EDA) space has done exceptionally well with over 16 percent growth. The semiconductor industry is expecting more than 10 percent growth in the EDA sector this year. I am expecting the first half of the next year to be similar, but the second half will have the effects of the large capital investments that happened last year. Also this year and we will probably see some price pressure. In general this is a relative good period for the semiconductor industry.

What are the trends that are driving the EDA industry today?

We are now in a big process transition - working on 20 nanometers chips. The EDA industry and the semiconductor industry are working closely together to solve a significant technology challenge - to get processes, technology and design in place for 20 nanometers. At the same time 28 nanometer technology, is now in place and has production capacity. So there are lots of growth in the next generation of design, software, tools, and infrastructure support. At the same time EDA is expanding for embedded software used to be a relative small part of chip design and now has grown in importance. Although none of the other major companies in EDA are in embedded software, for Mentor Graphics embedded software is one of our fastest growing businesses.

Another one is system design for automobile, planes, trains, and more, and that is a very fast growing part of electronic design automation. This is because the electronics in cars and planes have become so complex that it has to be automated and several companies like us, who have been investing significantly for the last couple of decades in this, are finally seeing the results of that investment. As a result of this, we also foresee that there will be an increase in the capabilities in the functional verification area since all the structures that are being put into the chips have to be verified more than ever. With the increasing number of functions put into a chip the challenges in verification also increases. We already see that one aspect of verification, i.e. hardware emulation starts to pick up very strongly that is also in connection with software verification. This is because, the take out on a 20 nanometer chip is very expensive, and you want to validate at least most of the software in it. Hence, emulation is going to come back strongly again.

What are the main concerns of chip manufacturers today?

The big concerns for manufacturers are resolution enhancement technology, router technology, and the physical verification. The big change in 20 nanometer is double paradigm, where you split a single level of the design into two parts and this requires complex process automation in the design, router tools comprehend, the physical verification software, know how to comprehend and find errors in that decomposition. That is probably the biggest process change that is occurring in this generation and it is mostly EDA driven.

 How is the competition thriving for Mentor Graphics?

There is always a tough competition in the EDA space. We are fortunate that we have significant market shares in the recent years. Over the last decade we have almost doubled our market share, to become the second largest EDA Company two years ago. The three biggest companies including us have a fairly constant market share, about 3/4th of the market.

 We compete by specializing and doing certain things better than anyone else. For example we have dominance in almost all of the physical verification market where our "Calibre" range of products is used by almost everyone. By the same measures, our competition has products in certain areas which our customer use. So, every company has its specialties and we focus on the ones we can be the best.

How is Mentor Graphics' tie-up with startups?

In recent years, we have begun to engage with startups closely. We have special programs for startups of which is 'Term for Startup' (TFS). Here, we make very special arrangements to give them early access to our wide range of design tools at a very low cost and help them get started. We also provide the design assistance they need early on. Another of our initiative is Cre8 Ventures which has been present in Europe and India for many years now. For startups money is one part of need but it is only a small part. The other thing that they need is help in getting introduced to some of their potential customers. Since some of their potential customers are already customers of Mentor Graphics, we are facilitating those kinds of contacts though this program.

How is India as a market for Mentor Graphics?

India as a market is enormous, and it is growing faster than western regions of the world. It is a hub where a very large share of the design activities of the multinational corporations takes place, and increasingly domestic companies here are becoming important for our business. India is quite strategic for our development. We have development sites in Noida and Hyderabad and increasingly they have been leading expertise in areas of our business.

A couple of years ago, we announced the capability of hundreds of software developers to work on the same emulator to verify the design. Most of that technology was designed in India. The ability to accelerate the test bench for a design was developed largely in India. We have a large number of customers who need an integrated environment for field programmable logic, Emulation, simulation, and formal verification all using the same software and the same compilers. All these are done and integrated here.

What are some of the challenges of operating in India?

Even though India produces a lot of highly qualified college graduates, the demand is high and so you are always competing to make sure that you retain your best people and attract new ones. This talent crunch is a major challenge.

How is Mentor Graphics' tie up with academia to overcome the challenge of talent crunch?

We have higher education programs with a wide variety of colleges in India. We have special and close corporation with a large number of other schools. I have personally given speeches in the IITs. In the past we had regular recruiting, regular programs to work with departments that teach electrical engineering and computer science and a number of targeted schools to recruit from. Most of our employees we hire straight from universities.

 What are the other geographies that Mentor Graphics sees future in?

China, Korea and Taiwan are fast growing areas in terms of usage of software. Many people believe that Brazil can do the same, but we have not started to see any evidence of that yet. Some eastern European countries and others will eventually emerge but will be much lower than the Asia Pacific.

 There is a lot of buzz going around Green IT? How is Mentor Graphics involved?

In the last five years we have been driving standardization to the next level, the RTL level. UPA for standard that originated in Mentor Graphics has now become pervasive for RTL design. The next stage is architectural design. We were the first ones to introduce products for the high level power performance tradeoffs. The family of products that we have today allows people to experiment with different architectures so they can reduce power by an order of magnitude or more in a chip design or product design.

What is your roadmap for the future?

We have made a number of announcements recently around 3D integrated circuits and the tools to design 3D have a complete flow for test and physical verification. We also made a number of announcements around high mobile design with the integration of embedded software with architectural design tools at the ESL level, in the integration of emulation with simulation with architectural evaluation and embedded software. We just announced a development environment for embedded software that won the best of show at the embedded system software. So, a lot of what we are announcing and doing is centered either around the move to next generation physical design or next generation high level design, particularly in embedded software and hardware software co-design. There will be activities around low power design as well. Next in line are also some new developments in our tools for automotive sectors.