If you had 1.6 Billion dollars to spend, would you really want to buy Mentor or a market basket of startups? In that sense I do agree that Cadence should be thinking more “Blue Ocean” than “Red Ocean.”

Thanks for your thoughtful comments and for sharing your uncle’s wisdom. As he said, “it’s generally accepted, so generally accepted it may not be true at all.” In the back of my mind I have similar thoughts regarding the Cadence-Mentor merger since everyone is so against it. Part of me thinks it may actually happen and may actually be the right thing.

To your points:

1) EDA overall may be growing, but ASIC EDA is dying, IMHO. I read a report that a Toppan 32nm mask set will cost ~ $4M. And a 32nm chip will probably have 100M gates, including numerous embedded processors. How many product companies will be able to afford this and take the risk that their 100M gate chip won’t need several respins requiring new masks. Qualcomm…Broadcom…Cisco. Not too many. Can 10 customers support an industry? Ultimately, the shift will be to software which is a different class of EDA tool.

2) Yes…taking market share has always been a strategy, but what about a Blue Ocean Strategy?

3) The large ASIC EDA companies tend to have evolutionary enhancements that leverage their existing capabilities. For instance, Synopsys adds placement aware synthesis to it’s synthesis offering and congestion aware synthesis to that. They do this so they can drag customers along to adopt the new products / capabilities with little change to their existing flow. It’s only the the small companies that take the leap since they have nothing to lose.

4) I agree - see #3

harry

EDA is a dying business - No, it’s growing and it’s supporting an Electronics industry (not just semiconductor devices) that is contributing pervasively to the world economy.

EDA companies are just trying to take market share from competitors - competitors are always trying to take market share from each other. But they are also stakeholders in growing the industry and there are new relationships and common efforts agreed to every month.

There’s very little new in EDA - problems are getting harder across the entire design spectrum (cells/blocks to chips to boards to systems, all with software and IP challenges). You could take many enterprise applications from three to five years ago and do just fine, you would be much harder pressed to use the same version of a tool for five years and remain competitive. Witness in particular the explosion in new analog solutions, an area that was viewed as “stable” two or three years ago.

All the innovation comes from the small companies - it’s harder for large companies to find and explore very early stage markets because of the challenges of managing large businesses for profitability and tin businesses for growth in the same company (ref. “Innovator’s Dilemma”).

I do agree with your final point: insanity is doing the same thing over and over and expecting a different result; more vendors need to try new approaches.

Take care,

JL