EDAgraffiti: The Book Paul McLellan EDAgraffiti: the book Copyright © 2010 Paul McLellan To purchase: www.lulu.com 2 3 CHAPTER 1: MAJOR INDUSTRY TRENDS 8 What did Moore really say? 9 Why EDA differs from ERP by more than one letter 11 Recutting the semiconductor pie 13 Tragedy of the commons and EDA 14 Lithography for dummies 15 Design For Manufacturing 17 For sale, fab, cost $40/second 20 Fab5 21 Arma virumque cano 23 Japan, lost in introspection 27 ARM, Atom, PowerPC 29 ESL and software signoff 32 The Economist on semiconductor 34 iSuppli report on process transitions 35 What will I want from my devices? 38 Changes in relative value 40 What should EDA do next? 42 GM and Cadence 44 Take the E out of EDA 45 EDA press 47 Mac and PC 49 PowerPC 51 Semiconductor cost models 53 Software signoff again 55 Is silicon valley dead? 57 Entrepreneurs ages 59 Designing a chip is like 61 EDA for the next 10 years 62 The VHDL and Verilog story 64 Shake that EDA malaise 65 CHAPTER 2: MANAGEMENT 68 Three envelopes 68 Semiconductor is not EDA 70 Finance 73 Two million per salesperson 75 Twelve-o-clock high 79 Startups and big companies: your end of the boat is sinking 81 Ready for liftoff 82 Customer support 85 Test cases 87 Strategic errors 89 4 Emotional engineers 91 CEO: a dangerous job 93 Channel choices 95 You comp plan is showing 97 Board games 99 Hiring and firing in startups 101 Application Engineers 104 The career path train doesn’t stop every day 106 How do you get a CEO job? 107 Managing your boss 109 Integration and differentiation 110 Big company guys don’t do small 112 Being CEO 114 Getting out of EDA 116 Hunters and farmers: EDA salesforces 117 Running a salesforce 119 How long should you stay in a job? 121 Spending money effectively 122 Interview questions 124 Acquistions: cull the managers 125 CHAPTER 3: MARKETING 128 City Slickers Marketing 128 Intel only needs one copy 129 Super models 131 Why does EDA have a hardware business model? 134 The arrogance of ESL 136 Ferrari vs Formula 1 138 He who goes first loses 140 All purpose EDA keynote 142 No sex before marriage in EDA 144 Standards 146 Semi equipment and EDA 148 It’s like football only with bondage 151 Pricing. Vases and coffee pots 153 A real keynote: move up to software 155 Competing with free EDA software 157 It’s turtles all the way down 159 Don’t listen to your customers 161 The art of presentations 163 Swiffering new EDA tools 165 Presentations without bullets 167 Creating demand in EDA 169 Finger in the nose 170 Corporate CAD cycle 172 Licensed to bill 174 DAC 176 5 The Denali party 178 Value propositions 180 Being too early to market 181 Barriers to entry 183 CHAPTER 4: ENGINEERING 186 Where is all open source software? 186 Open source again 188 Why is EDA so buggy? 189 Groundhog Day 191 Power is the new timing 193 Power again 195 Multicore 198 Internal development 201 Process variation: you can’t ignore statistics any more 204 CDMA tales 206 Another look at internal development 208 CHAPTER 5: FINANCE AND INVESTMENT 211 Venture capital for EDA is dead 211 Venture capital for your grandmother 213 EDA: not boring enough 214 One hit wonders 216 Will you greenlight my chip 218 Crushing fixed costs 220 Technology of SOX 222 EDA and startups: $7M to takeoff 223 EDA startups: channel costs $6M 225 FPGA software 227 Wall Street Values 228 Royalties 230 SaaS for EDA 232 Why are VCs so greedy? 234 Term sheets 236 The antiportfolio 238 CEO pay 240 CHAPTER 6: BOOKS 243 Innovator’s dilemma 243 The book that changed everything 245 Relevance lost 247 Crossing the chasm 248 Mr Rodgers goes to Washington 251 Early exits 252 Four steps to the epiphany 253 6 Chips and Change 255 The Flaw of Averages 257 CHAPTER 7: OFF-TOPIC 260 What color is a green card? 260 China and India 262 Visa. Priceless 264 Downturn 265 Old standards 267 San Francisco: silicon valley’s dormitory 269 Patent trolls 270 Patents 272 Where does everybody come from? 275 Public affluence private squalor 277 7 Introduction This book is an outgrowth from the blog EDAgraffiti on EDN magazine online. Although the basis of the book is the original blog entries, there is new material and the old material has been updated and reorganized. When moving the material from a blog into a book I had to decide what to do about what were links to other parts of the web. I decided that rather than putting in long URLs in footnotes, which are unpleasant to type, I’d make sure that there was enough information to find everything with a search engine. So, for example, rather than giving an explicit URL for a book on Amazon, if you have the title it should be straightforward to find. I’d like to thank Ed Lee and Jim Hogan for encouraging me to do the blog in the first place, and the editors of EDN magazine for hosting it. Jim also created the map of semiconductor company relationships that appears in this book. My son Sam designed the EDAgraffiti logo and wall. The blog is here. Paul McLellan San Francisco, March 2010 Email: [email protected] 8 Chapter 1: Major industry trends What did Moore really say? Every EDA marketing presentation starts off by pointing out that Moore’s law is making some problem worse. Of course, just the problem that the EDA product pitched in the rest of the presentation is designed to solve. Everyone sorta knows Moore’s law but few people realize just what it was he said over 40 years ago, and just how prescient he was, or have even read his original paper. In 1965, Gordon Moore was Head of R&D at Fairchild. This was several years before Moore left Fairchild to found Intel. Moore noticed that the number of transistors on the integrated circuits that Fairchild was building seemed to double every two years, as shown in the graph here from Moore’s original article. As he pointed out there, "Integrated circuits will lead to such wonders as home computers, automatic controls for automobiles, and personal portable communications equipment." Remember that this was 1965, when an integrated circuit contained 64 transistors: this was an extraordinary prediction. 9 Surprisingly, over 40 years on, semiconductors seem still to be increasing in complexity at this rate. Gordon Moore’s original remark is, of course, now known as “Moore’s Law” and is expected to continue for some time. Exponential growth like this over a sustained period of time, rather like compound interest, has a dramatic effect. In the seventies a chip may have contained a few hundred transistors. Today a chip can contain billions of transistors and in the future the predictions are for chips with several hundred billion transistors. This is how all the electronics for a high-end mainframe computer can be compressed into a single chip. Only we attach a radio to it and call it a cell-phone. Or we put a lens on it and call it a digital camera. Or we attach a dish to it and call it satellite TV. Or we take it on a plane and use it to write about Moore’s Law. But it is possible to look at Moore’s Law the other way round: the cost of any given functionality implemented in electronics halves every two years or so. Over a period of twenty years this is a thousand-fold reduction. A video-game console, which is so cheap that children can buy them from their allowances, has far more computing power and much better graphics than the highest-end flight simulators of the 1970s, which cost millions of dollars. An ink-jet printer has far more computing power than NASA had at its disposal for the moon-shots (supposedly a total of 1 MIPS1 on all the computers they had put together). It is this exponential driving down of electronic costs that had transformed so many aspects of our lives in the last twenty years or so since integrated circuits became cheap enough to go into consumer products. Here is Gordon Moore again, this time from a 1995 Fortune article: “The whole point of integrated circuits is to absorb the functions of what previously were discrete electronic components, to incorporate them in a single new chip, and then to give them back for free, or at least for a lot less money than what they cost as individual parts. Thus, semiconductor technology eats everything, and people who oppose it get trampled.” Moore’s Law started as an observation, became a prediction, and eventually transformed into a blueprint for the semiconductor 10 industry. The International Technology Roadmap for Semiconductors is largely an analysis of what it will take to make Moore’s Law continue to be true. Moore’s Law has thus become a self-fulfilling prophecy for the time being. Of course the really interesting question is for how much longer? 1 Have you noticed that people like to write or say 1 MIP as if MIPS was plural. But, of course, the S stands for “seconds”. End of today’s nitpicking. Why EDA differs from ERP by more than one letter What is it about EDA that makes it different from other software businesses? When the CFO of Texas Instruments buys Oracle or SAP, he or she doesn’t study what algorithms they use in their relational database.