( ESNUG 454 Item 19 ) ------------------------------------------- [04/28/06]
From: Barry Pangrle <pangrle=user domain=archpro-da spot gone>
Subject: Barry Pangrle -- Numb3rs, Numbers, or some very Fuzzy Math in EDA
Hi John,
How are things going? I don't know if you watch the popular TV show
"Numb3rs", but some numbers have been flying around in EDA and I did some
calculations based on them (probably falls into the "fuzzy" math category)
that lead to some other interesting numbers.
First, starting with the claim that companies spend $50K per year per
designer on EDA tools [1]. If people agree that the EDA market is roughly
$4 billion per year then this would imply that there is somewhere in the
neighborhood of 80,000 engineers for whom the tools are being bought.
An issue here already is that the $4 billion in "EDA" isn't all tool
purchases -- there are services and other IP thrown into the mix so some
scaling factor (less than 1) needs to be included.
Second, if semiconductor companies are spending $5 to integrate tools into a
complete flow for every $1 spent on purchasing the tools, then the complete
cost per engineer would be $(5+1) * $50 K == $300 K per engineer per year.
Certainly some of the additional $5 is the cost of more engineers to put
the flow together, still it seems interesting that just the tool/flow
overhead cost would be $300K per engineer per year. Add in machines, office
space, health care + other overhead and that seems like a lot of $ before
the engineer even takes home a dollar. It would also seem that this would
have to have a pretty big impact on the whole outsourcing equation, too.
(Without getting into any license issues.)
So if we go back to the first number and use a scaling factor of 0.5, i.e.
half the revenue is tool based, that would imply 40,000 engineers at a cost
of $300K per engineer per year for tools and tool integration costs or
about $12 billion per year. It would also seem to imply then that there
is more potential revenue for the EDA companies to go after and that the
tools and integration costs are maybe running closer to the 5-6% range of
semiconductor revenue.
Is 5-6% of semiconductor revenue expected? Nothing new? Fuzzy math?
- Barry Pangrle
ArchPro DA San Jose, CA
[1] OpenAccess adoption still limited, says panel
http://www.eetimes.com/showArticle.jhtml?articleID=185300531
Citing research which he said revealed that peer companies spend $50,000
per year, per design engineer, on EDA tools, James Lin, vice president of
the technical infrastructure at National Semiconductor Inc., said, "If
EDA companies collaborate more, we are going to benefit from reduced
tool costs." [1]
[2] EDA industry needs to take responsibility, Madhavan says
http://www.eetimes.com/showArticle.jhtml?articleID=185300532
Citing a report from market analyst firm Gartner Dataquest, Madhavan said
that for every $1 that semiconductor companies spend on EDA tools, they
spend $5 to integrate them into a complete flow. [2]
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