( ESNUG 423 Item 3 ) -------------------------------------------- [02/26/04]
Subject: Why Do China & India Get U.S. EDA Tools At A Discount?
With all of the recent talk about out-sourcing, can you assure American
engineers that you do not offer your EDA tools in Foreign markets at
discounted rates that would serve to undermine
our competitiveness?
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When I was at Synopsys two years back I read an interview with Aart. He
made a statement to the effect that pricing in the Far East (China)
naturally had to be lower because the cost of labor was so much lower
there. No one could justify paying US proces for the tools. I later on
tried to find that statement but I failed. I believe it was in EE Times.
I find it disconcerting that one can give China access to our advanced
technology at significantly lower prices just to make sure we kill off
our own electronics companies who pay 'full price'. It is not that
Cisco pays full price... there purchasers know how to strangle you ...
but the Chinese companies do not buy much. They certainly do not
contribute to Cadence as I see it!?!? Eventually we will have no one
paying the development cost.
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With software jobs draining from the U.S. to India, China and Eastern
Russia where labor is a fraction of the cost and EDA software pirating is
a way of life, what are your plans in terms of a) your future EDA
licensing/use charges for dwindling U.S. IP development companies and b)
your plans to work with those developing regions to keep your costs down
and maintain patents and copyrights?
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The other issue is the KaZaa-like versions of their software that is showing
up across Russia and China no one pays licensing fees for, which I expect is
a bigger concern for them.
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I have already asked Aart of Synopsys these questions, and I cannot really
say that I have got a clear answer.
Why EDA companies are dumped EDA tools cost to India and China at 10-30% of
U.S , and Europe cost? How do design centers in U.S and Europe can survive
with this double attack from both dumped EDA tools and Engineering cost is
close to nothing? Is that the EDA loyalty for customers who have for many
years pay high cost licensing and maintenance?
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