Chip design automation - the next big thing

The Indian product market, worth $110 million in 2004, is expected to be $1 billion by 2015.

The chip automated our lives with electronic gizmos. Chip designing has been a good business proposition for Indian technology firms. Now, we are moving towards the next step, designing tools that automate the chip designing process itself.

With electronic equipment consumption growing in India, electronic design automation (EDA) companies, which supply software tools to design chips for consumer appliances such as mobile phones, TV, personal digital assistant (PDA) and music players, are witnessing rapid growth.

This growth is expected to accelerate with more players entering the fray in the coming years as electronics consumption goes up significantly.

At present, there are seven EDA companies, both multinational and Indian, operating in the country. Cadence, Mentor Graphics, Magma, Synopsys, Circuit Sutra, Sequence Design and SoftJin are all reporting growth. The India Semiconductor Association (ISA) expects more domestic players to start providing EDA tools to chip designers.

EDA companies are the starting blocks for designing Very Large Scale Integration (VLSI) chips, the boards on which the chips are mounted and the hardware itself.

The Indian EDA industry consists of EDA product companies as well as EDA service companies catering to the needs of the former.

"We are witnessing the entry of more MNCs to serve their clients in India. Also, there are start-ups entering the EDA space. Companies are are tying up with educational institutes for research into EDA tools. The Indian EDA product market which was worth $110 million in 2004 is expected to be around $ one billion by 2015," ISA President Poornima Shenoy said.

According to the ISA / Frost & Sullivan report, Indian electronics production which was worth $10.99 billion in 2005 is expected to reach $58 billion by 2010 with a compounded annual growth (CAGR) rate of 26.4 per cent. India is witnessing huge growth in the chip design segment to cater to the domestic and MNC electronic equipment manufacturers.

According to another recent estimate by Gartner, the total electronic equipment production in India will reach $32 billion in 2011, compared to $14 billion in 2006, (CAGR) of 18 per cent.

"A majority of the chip design activity is happening around the cutting edge of technology, namely at 90 nm (nanometer), 65 nm and even 45 nm nodes. These kinds of designs are usually for very high-end applications. The need for sophisticated EDA tools is paramount in ensuring design closure. Hence technology introduction by design companies in India is a major growth driver for the EDA industry," noted Pradip K Dutta, president and managing director, Synopsys India.

According to him, the second growth driver is the emergence of products for the local market.

"What works here (India) is the volume. The latest trend in EDA tools is around improving yield, enabling low power design (to enable longer battery life and improved performance of consumer appliance) and verification, reducing test cost and finding functional bugs early in the design cycle," he added.

Dutta foresees good growth for EDA companies in India. "In today's complex designs, lack of access to sophisticated EDA tools would be considered a show stopper and hence for EDA companies getting traction is not an issue. The key factors would be who can provide the best integrated suite of tools, after sales support and the local engineering muscle to front-end customer's problems tomorrow," he said.

Sathya Prasad, director, strategic planning, Cadence India, noted that design rules are changing as the demand for electronic equipment grows. If any consumer product has to perform efficiently, the error has to be lowered.

"The opportunities and challenges for EDA companies have increased significantly in India over the last two years. From just being a tool solution, now EDA companies have to offer a whole range of design solutions," he said.