Cluster Profile: EDA Industry in Oregon

by Linda Barney, founder and owner, Barney and Associates

According to the EDA Consortium (EDAC), the electronic design automation (EDA) industry is aimed “at the design and testing of electronics—anything electronic from computer chips, cellular phones, pacemakers, controls for automobiles and satellites to the servers, routers and switches that run the Internet.” Products created by EDA firms enable electronic and circuit designers to “try to model the behavior of their designs and analyze the complex interactions of millions of constituent parts in their designs to ensure completeness, correctness and manufacturability of the final product.”

History and consolidation in EDA industry in Oregon
Oregon has a rich history in the EDA industry and is home to Mentor Graphics, one of the founders of the EDA industry, as well as a number of smaller EDA firms. Mentor Graphics was started by former employees of Tektronix who created their own electronic design automation tools to test internal equipment. The presence of microchip companies in the Portland/Vancouver area such as Intel and Sharp Electronics has also led to the emergence of EDA firms because the chip companies need tools to test their products.

A major consolidation is occurring in the EDA industry, with smaller EDA firms being purchased by larger firms. Over the past decade, Oregon has followed the same trends seen by the EDA industry as a whole. In the early 1990s, there were 10 or more EDA firms in Oregon, concentrated mostly in the Portland area. Since that time, seven of these Oregon firms have been purchased by larger firms including Mentor Graphics, Cadence Design Systems, Synopsys, Inc., Lattice Semiconductor and Credence. The larger EDA firms have various areas of technical expertise. Credence handles a specific technology within EDA — that is, test. Mentor Graphics, Synopsys and Cadence cover a much broader range of technologies within the EDA space, including test.

Currently in Oregon, there are a few of the older EDA-related companies in existence as well as new companies forming or beginning to work as independent companies again. However, the consolidation has changed the face of the EDA industry in Oregon.

Mentor Graphics: Oregon’s leading EDA company
Mentor Graphics, headquartered in Wilsonville, is a technology leader in EDA, providing software and hardware design solutions that enable companies to develop better electronic products faster and more cost-effectively. According to Ry Schwark, public relations director at Mentor Graphics, “EDA was arguably founded in Oregon by Mentor Graphics. We are the oldest surviving EDA company in the industry and are celebrating our 25th anniversary year. We were founded in 1981, the same year that IBM introduced the first PC.” The company conducts world-class research and development in 28 engineering sites worldwide and has 48 sales offices around the world. There are 1,100 employees at its Oregon headquarters and 4,100 employees worldwide.

As Schwark goes on to say, “Mentor Graphics is the leader in a number of product areas because of our philosophy that it is important to develop your own tools and be No. 1 at what you do. Many EDA firms expand their product lines by locating small EDA companies and acquiring them to gain new products and technologies rather than doing their own product development. Mentor believes you need to invest in developing the tools internally, so that your team can master the technology and get closer to the customers and problems. The added benefit is that it keeps your firm ahead of the game technologically."

Mentor Graphics has locations all over the world and does business globally with a large percentage of revenue coming from sales outside of North America. At the same time, its largest research and development facility is located in Wilsonville, Oregon.

As one of the founders of the EDA industry, Mentor Graphics has had a significant impact on the development of the industry as a whole. The company offers innovative products and solutions that help engineers overcome the design challenges they face in the increasingly complex worlds of board and chip design. Mentor Graphics has four key lines of business including traditional printed circuit board (PCB), design-to-silicon, scalable verification and new and emerging market products.

As Schwark puts it, “Mentor Graphics is the No. 1 supplier worldwide in providing software used in PCB design. Our software is used in the design of almost any form of electronics based on computer chips.” Mentor Graphics provides industry-leading back-end tools used to take a finalized integrated circuit design and ensure that the design is ready for manufacturing. The company’s scalable verification products are used by circuit board designers to verify that a circuit’s design logic is functioning correctly.

Some of the new Mentor Graphics electrical harness and electronic automotive design products are used by transportation manufacturers to design and verify the electrical systems inside automobiles, planes or trains. Schwark indicates that electronic content in vehicles has vastly expanded over the past decade. Typically, automotive manufacturers have not had a major investment in electronic software verification tools used in the design and testing of electronic systems. “Mentor’s line of electronic design solutions for the automotive industry helps manufacturers verify that the many electrical systems work as planned by allowing them to test and modify circuit designs to make sure that they can get good manufacturing results,” Schwark explains. “This will have a huge economic impact for transportation companies, saving them both time and money.”

Mentor Graphics also is active in consortiums and standards committees within the EDA industry. The company is actively involved in the EDA Consortium (EDAC), a consortium of EDA providers that works on industry problems such as export controls and piracy issues. Schwark chairs the EDAC Communication Board and Anne Cirkel chairs the EDAC Trade Show committee. In addition, Mentor is also actively involved in the Accellera consortium that works primarily in standardization and SI2 a group focused on integration and improving productivity and reducing cost in creating and producing integrated silicon systems.

Mentor Graphics is proud to be an Oregon company. “Having lived in several other parts of the country, I can tell you this is a great place to live,” Schwark says. “Mentor has a low employee turnover rate, not only because Mentor is a good place to work — for example, we have been named numerous times in Working Mother’s ‘Best Companies to Work For’ — but also because Oregon is a great place to live.”

Synopsys
Synopsys, Inc., is a world leader in delivering semiconductor design software, intellectual property (IP), design-for-manufacturing (DFM) solutions and professional services that companies use to design systems-on-chips (SoCs) and electronic systems. The company’s products enable semiconductor, computer, communications, consumer electronics and other companies that develop electronic products to improve performance, increase productivity and achieve predictable success from systems to silicon. Synopsys, founded in 1986 and headquartered in Mountain View, California, has some 5,100 employees worldwide.

Synopsys is also one of the founding companies of the EDA industry. Dr. Aart de Geus, Synopsys CEO, is the co-inventor of a technology that transformed the industry — synthesis. Synopsys pioneered the commercial application of logic synthesis that has since been adopted by every major electronics company in the world.

Synopsys first established a presence in Oregon with the acquisition of Logic Modeling in 1994. Synopsys also purchased Qualis in 2003 and Avant! in 2003 (Avant! previously purchased Analogy in 2000). Synopsys has some 330 employees in Oregon. The current location in Hillsboro was opened in February 2002 (on land purchased in 1999). The Synopsys Oregon team is primarily focused on R&D and represents the entire range of Synopsys technology groups.

According to Robert Damiano, Synopsys fellow and vice president, Advanced Technology Group, “Synopsys is focused on helping design engineers and manufacturers solve their most difficult challenges. The Synopsys team in Oregon plays an integral part in delivering technology that can help these customers handle the timing, complexity and cost challenges handed down by the consumer electronics industry. In addition to our commitment to customers, the Hillsboro team has a strong commitment to the community in which we live and work. Among other activities, Synopsys Oregon employees participate in SMART (Start Making a Reader Today), help out with local science fairs, assist the Red Cross, and make computer donations to help the next generation of leaders gain exposure to technology. Synopsys Hillsboro even provides space for the local fire department to do training.”

EDA market dynamics and barriers
One barrier to entry in becoming a big EDA company is global support and sales. Schwark of Mentor Graphics explains, “It is easy to start an EDA company and support customers in Oregon or Silicon Valley. However, as an EDA company begins to grow and starts going global, the firm needs to provide global support and maintain sites all over the world. It is rare to find a company with enough revenue from product sales to support the expansion of a global infrastructure.”

What commonly happens in the EDA industry is that once a firm proves its tools are effective in a customer base, then the firm markets itself to one of the big EDA companies. “This enables them to use the larger firm’s resources and marketing expertise to move their product onto the global marketplace,” Schwark adds.

How smaller or start-up firms view the future of EDA
New EDA-related firms are being started in Oregon. These firms are aware that they need to find ways to obtain funding and roll out their products to a global marketplace. This section of the article looks at how Lynguent and Laflin Limited, two small EDA-related start-up firms, are addressing these issues and how they view their roles in the changing EDA arena.

Lynguent
Lynguent is a start-up company developing software that enables engineers to design and validate electronic components and systems. According to Andrew Levy, Lynguent vice president of marketing, “The company is headquartered in Portland because this is where we live and we wouldn’t want to be anywhere else. There are many local people with backgrounds in EDA who understand and appreciate what we do, and we plan to expand our team here. At the same time, EDA start-ups in Oregon have two strikes against them: the local community does not nurture start-ups the way it used to, and the EDA industry is not growing as it was 10 or 15 years ago, so it is no longer as attractive to investors.”

Levy indicates that Lynguent does not view itself strictly as an EDA company. “We are fortunate that we are not simply an EDA company. We are targeting EDA applications as an initial market, but our core technologies will allow us to expand our product lines to address other — much larger — engineering segments.

Laflin Limited
Laflin Limited offers a service for EDA-related products designed to help small EDA companies provide sales and support to Japan or Asia. According to Rick Ader, president and CEO of Laflin Limited, “Laflin is not a typical EDA company as it does not have products that it has internally developed. Laflin acts as a distributorship, providing sales and services for electronic design automation and intellectual property providers from the U.S. and Europe targeting the Japanese and Asia-Pac integrated circuit design and manufacturing marketplace.” Ader, who is bilingual in Japanese and English, has experience in Japan working as the general manager of sales and operations for Japan and Asia-Pac at Summit Design, Monterey Design Systems and in engineering positions in Toshiba (Japan).

Ader believes that using Laflin to help sell and support products in Japan and other parts of Asia can greatly benefit small EDA firms that may not have the funding, language skills or Asian contacts to successfully set up Asian sales offices. “Laflin can be a key component to the incremental growth in the early-to-mid stages of such a company’s game plan in Japan,” he points out. Ader also indicates that there are benefits to locating the company in Oregon, “Why stay in Oregon? Because it is a great place to live. And it has easy access to both Japan and the Silicon Valley.”

Future of EDA industry in Oregon
Even with the changes and consolidation in the EDA industry, executives in Oregon EDA-related companies feel the EDA industry is expanding into other exciting areas and that EDA has a bright future. Schwark puts it this way: “In the past, companies or designers would buy equipment, run their design through and the design would work. In today’s world, the equipment alone doesn’t really solve the problem. The complexity of circuits and designs now requires that firms need to run need sophisticated software on the design in conjunction with the equipment to get a recipe that is effective at producing chips. Companies not only must determine whether a chip or circuit design is logically correct but also must ensure that it will manufacture correctly. Because of these changes, the design-for-manufacturing market has exploded over the last few years.”

EDA executives interviewed for the article indicate that the EDA industry can expand as it moves into electronics design and testing in non-traditional industries such as transportation, medical equipment, telecommunications or satellites. As Schwark summarizes, “The ability to test a circuit or chip before it is manufactured is now a critical factor in circuit and chip manufacturing, and the payoff is enormous to companies, making EDA even more compelling.”

About the author
Linda Barney is the founder and owner of Barney and Associates, a technical and marketing writing firm. Founded in 1990, Barney and Associates specializes in technical writing, documentation, online help, Web content and training. Barney and Associates also provides a wide range of marketing writing services including creating media articles, white papers, data sheets, solution briefs, case studies, Webcast content and reviewer’s guides. Contact Linda at linda@barneyassoc.com.