Some time ago, Cadence Design Systems Inc. had announced the EDA360 vision! As per Jaswinder Ahuja, corporate VP and MD of Cadence Design Systems India, the Cadence vision of EDA360 is said to be well and alive. The organization has been aligned around the EDA360 vision.
The EDA360 is a five-year vision for defining the trends in the EDA industry, based on what Cadence is observing in the industry and the direction in which, it feels, the industry will go.
At Cadence, the Silicon Realization Group is headed by Dr. Chi-ping Hsu. The SoC Realization Group is headed by Martin Lund, and Nimish Modi is looking after the System Realization Group. Cadence’s focus has been on in-house development and innovation. Tempus has been a major announcement from the Silicon Realization Group.
What’s going on with EDA360?
There has been a renewed thrust in the SoC Realization Group at Cadence. Already, there have been three acquisitions this year — Cosmic Circuits, Tensilica and Evatronix. Cadence is buying the IP part of the business from Evatronix. This acquisition is ongoing and will be announced in June 2013.
On the relationship between the electronics and the EDA industries, Ahuja said the electronics industry is going through a transition, and that the EDA industry needs to change. The importance of system-level design has increased. Companies are currently focusing on optimizing the end user experience.
It is always a pleasure speaking with Dr. Walden (Wally) C. Rhines, chairman and CEO, Mentor Graphics Corp. I met him on the sidelines of the 13th Global Electronics Summit, held at the Chaminade Resort & Spa, Santa Cruz, USA.
Status of global EDA industry
First, I asked Dr. Rhines how the EDA industry was doing. Dr. Rhines said: “The global EDA industry has been doing pretty well. The results have been pretty good for 2012. In general, the EDA industry tends to follow the semiconductor R&D by at least 18 months.”
For the record, the electronic design automation (EDA) industry revenue increased 4.6 percent for Q4 2012 to $1,779.1 million, compared to $1,700.1 million in Q4 2011.
Every region, barring Japan, grew in 2012. The Asia Pacific rim grew the fastest – about 12.5 percent. The Americas was the second fastest region in terms of growth at 7.4 percent, and Europe grew at 6.8 percent. However, Japan decreased by 3 percent in 2012.
In 2012, the segments that have grown the fastest within the EDA industry include PCB design and IP, respectively. The front-end CAE (computer aided engineering) group grew faster than the backend CAE. By product category, CAE grew 9.8 percent. The overall growth for license and maintenance was 7 percent. Among the CAE areas, design entry grew 36 percent and emulation 24 percent, respectively.
DFM also grew 28 percent last year. Overall, PCB grew 7.6 percent, while PCB analysis was 25 percent. IP grew 12.6 percent, while the verification IP grew 60 percent. Formal verification and power analysis grew 16 percent each, respectively. “That’s actually a little faster than how semiconductor R&D is growing,” added Dr. Rhines.
Status of global semicon industry
On the fortunes of the global semiconductor industry. Dr. Rhines said: “The global semiconductor industry grew very slowly in 2012. Year 2013 should be better. Revenue was actually consolidated by a lot of consolidations in the wireless industry.”
According to him, smartphones should see further growth. “There are big investments in capacities in the 28nm segment. Folks will likely redesign their products over the next few years,” he said. “A lot of firms are waiting for FinFET to go to 20nm. People who need it for power reduction should benefit.”
“A lot of people are concerned about Japan. We believe that Japan can recover due to the Yen,” he added.
This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.
According to the WSTS’s Jan 2013 HBR (posted on March 8th, 2013), January 2013’s actual global semiconductor sales came in at $22.824 billion. This actual sales result for January is 2.9 percent higher than January’s sales forecast estimate, namely $22.180 billion.
Plugging January’s actual sales number into the Cowan LRA forecasting model yields, the following quarterly, half-year, and full year sales and sales growth forecast expectations for 2013 compared to 2012 sales depicted in the table.
It should be highlighted that with last month’s publishing of the final 2012 sales result by the WSTS, the Cowan LRA Model for forecasting global semiconductor sales was updated to incorporate the full complement of 2012′s monthly sales numbers, thereby capturing 29 years of historical, global semiconductor (actual) sales numbers as gathered, tracked and published each month by the World Semiconductor Trade Statistics (WSTS) on its website.
As described last month, the necessary mathematical computations required in order to update the complete set of linear regression parameters embedded in the Cowan LRA forecasting model for determining future sales were carried out. The newly derived set of linear regression parameters therefore reflect 29 years (1984 to 2012) of historical global semiconductor sales as the basis for predicting future quarterly and full year sales and sale growth forecast expectations by running the Cowan LRA Model.
Therefore, the table given above summarizes the model’s latest, updated 2013 sales and sales growth expectations reflecting the WSTS’s January 2013′s actual sales as calculated by the model’s newly minted set of linear regression parameters.
Note that the latest Cowan LRA Model’s expected 2013 sales growth of 6.6 percent relative to 2012 final sales ($291.562 billion) is more bullish than the WSTS’s adjusted Autumn 2012 sales growth forecast of 3.9 percent as well as the WSTS’s Autumn 2012′s original forecasted sales growth of 4.5 percent which was released back in November of last year.
In addition to forecasting 2013’s quarterly sales estimates the Cowan LRA Model also provides an forecast expectation for February 2013’s sales, namely $22.436 billion. This sales forecast yields a 3MMA forecast for February of $23.571 billion assuming the no or minimal sales revision is made to January’s actual sales.
Finally, the table provided below details the monthly evolution for 2013’s sales and sales growth forecast predictions as put forth by the Cowan LRA forecasting model dating back to September of last year.
Note that the most recent 2013 sales growth forecast is up compared to the previous two forecasts of 5.5 percent and 3.6 percent, respectively.
It should be mentioned that the previous 2013’s sales growth forecast for Dec 2012, namely 3.6 percent, was based upon a sales forecast estimate for Jan 2013 versus the latest sales growth forecast estimate of 6.6 percent, which utilizes Jan’s actual sales result just released in the WSTS’s January 2013 HBR, Historical Billings Report.
This is a continuation of my coverage of the fortunes of the global semiconductor industry. I would like to acknowledge and thank Mike Cowan, an independent semiconductor analyst and developer of the Cowan LRA model, who has provided me the latest numbers.
With the ‘closing out’ of the final, overall sales result for 2012 by the WSTS, the Cowan LRA model for forecasting global semiconductor sales has been updated to include the full complement of 2012′s monthly sales numbers, thereby incorporating 29 years of historical, global semiconductor (actual) sales numbers as gathered, tracked and published each month by the World Semiconductor Trade Statistics (WSTS) organization.
The necessary mathematical computations required to update the complete set of linear regression parameters embedded in the Cowan LRA forecasting model have been carried out.
The newly derived set of linear regression parameters reflect 29 years (1984 to 2012) of historical global semiconductor sales numbers as a basis of predicting future quarterly and full year sales and sale growth forecast expectations by exercising the Cowan LRA model.
Therefore, the table given here summarizes the model’s latest 2013 sales and sales growth expectations as a function of the model’s range (low, expected and high) for January 2013′s sales forecast estimates as generated by the newly, updated model’s linear regression parameters.
It is estimated that in 2013, the global semiconductor industry is likely to reach $302.022 billion, a growth of 3.6 percent.
Note that next month’s forecast will be based on January 2013′s actual sales number, which is anticipated to be released by the WSTS at the end of the first week in March. Once posted, the model will be rerun to yield the quarterly and full year sales, and sales growth expectations for 2013, respectively.
Finlay Colville, vice president, NPD Solarbuzz, USA, recently presented the 10 key trends for the PV industry. According to him, the 10 key trends are:
1. PV demand growth. The industry has been characterized by strong growth rates of 25 percent to >100 percent Y/Y for the past decade. Now, the industry needs to plan for growth at more modest levels.
2. Globalization of PV demand. The emerging regions emerged for PV demand in 2012.
3. China end-market demand in 2013. China is forecast to account for approximately 25 percent global demand in 2013. The emerging demand is confined to a select group of countries across the three emerging regions.
4. Capacity imbalance reset. The nameplate capacity levels at the 60-GW level are often cited. However, the the PV industry currently has an ‘effective’ capacity of 41-42 GW. Therefore, demand needs to exceed 40 GW for proper reset.
5. Competitive shakeout. The top-10 module suppliers by MW for 2012 only comprised 50 percent of the year shipments. Also, a similar pattern is seen for c-Si cell production. We can expect another two years of shakeout on the supply side.
6. Cost and price rationalization. Every segment of the supply side is subject to price/cost pressure: from poly to BoS supply. Even reducing the silicon/nonsilicon costs of modules to 53c/W level by the end of 2013 may still result in negative gross margins.
7. Supply and demand rationalization. The poly suppliers have been operating at reduced utilization since 2H’12.
8. Evolution of PV technology roadmaps. Strong marketshare gains from standard c-Si multi ingot/wafers. The end-markets are driving module efficiencies and power ratings. The alternative growth methods have not gained traction and are being phased out.
9. Capital expenditure cyclic patterns. The PV process equipment suppliers have been impacted severely by overcapacity and overinvestments of 2010 and 2011. There is a strong chance that 2014 will end up as low as 2013. Also, technology-buy cycles don’t exist as yet in the PV industry.
10. Domestic protectionism counter measures. The effects of trade wars may yet have a profound effect on the PV industry into 2014. There will be direct effect of global overinvestment into domestic manufacturing. The other countries have an impact, but China and Europe decisions are key.
In summary, the PV industry is a 30-GW end-market today, and is forecast to grow to the 40-GW level in 2015. Europe demand is declining, but greater number of countries/territories expected to provide new PV demand. Demand in China during 2013 is essential for local suppliers.
The PV industry is capable of producing 12-15 GW per quarter. Supply and demand need a 40-GW+ market to balance. The shakeout phase is proceeding slowly, and will continue for the next two years. Reducing costs are not yet keeping up with price declines. ASP and ISP stabilization period is needed badly.
The end-market demand has become dependent on low ISPs. Also, multi c-Si based modules are dominating the industry. PV equipment suppliers are unlikely to see meaningful new order intake until 2014 or beyond. Finally, trade wars and domestic protectionism measures are crucially dependent on the EU and China decisions in 2013.
How will the global semiconductor industry perform in 2013? After a contrasting spell of predictions for 2012, I see no change in 2013! So, what’s the answer to the million-dollar question posed as my headline?
After a disappointing and challenging 2012, global semiconductor executives believe that the worst is nearly behind them, and they are making investments to position their companies for a sustained, broad-based, multi-year recovery in 2013, as per a KPMG global semiconductor survey.
On Feb. 3, the Semiconductor Industry Association (SIA) announced that worldwide semiconductor sales for 2012 reached $291.6 billion, the industry’s third-highest yearly total, ever but a decrease of 2.7 percent from the record total of $299.5 billion set in 2011. Total sales for the year narrowly beat expectations from the World Semiconductor Trade Statistics (WSTS) organization’s industry forecast.
The World Semiconductor Trade Statistics (WSTS) estimated that the global semiconductor market in 2012 will be $290 billion, down 3.2 percent from 2011, followed by a recovery of positive 4.5 percent growth to $303 billion in 2013.
The worldwide semiconductor revenue is projected to total $311 billion in 2013, a 4.5 percent increase from 2012 revenue, according to Gartner Inc. The worldwide semiconductor revenue totaled $298 billion in 2012, a 3 percent decline from 2011 revenue of $307 billion, according to preliminary results by Gartner.
The outlook for the global semiconductor industry in 2013 will likely be 7.9 percent, according to Future Horizons. It means, the industry will likely grow to $315.4 billion in 2013. The Cowan LRA foreasting model put out the following sales and year-on-year sales growth numbers for 2012 and 2013: $292.992 billion (-2.2 percent) and $309.244 billion (+5.5 percent), respectively.
Databeans expects 2013 will see a rebound, with the semiconductor industry growing by 7 percent from 2012 totals to reach $313.04 billion. IDC forecasted that the worldwide semiconductor revenues will grow 4.9 percent and reach $319 billion in 2013.
IHS iSuppli claimed that the semiconductor silicon revenue will close 2012 at $303 billion, down 2.3 percent from $310 billion in 2011. The projected decline comes in contrast to the 1.3 percent gain made last year.
IC Insights forecasted 6 percent IC unit growth for 2013 based on expectations of global GDP to rise to 3.2 percent. According to IC
Insights, in 2017, China is expected to represent 38 percent of the worldwide IC market, up from 23 percent, 10 years earlier in 2007. Does this mean the USA and Europe are loosing their sheen?
The global semiconductor industry may record only 1.5 percent growth In 2013, as per The Infornation Network. There is, however, the possibility for a snap-back in revenues for 2013, irrespective of macroeconomic factors, such as what occurred in 2010.
Over the next three years, industry analysts estimate the global industry will grow approximately 6 percent 2013-2016 CAGR, according to Somshubro Pal Choudhury, managing director, Analog Devices India Pvt. Ltd.
Late 2012, I was speaking with Dr. Wally Rhines, chairman and CEO, Mentor Graphics. He said: “After almost no growth in 2012, most of the analysts are expecting improvement in semiconductor market growth in the coming year. Currently, the analyst forecasts for the semiconductor industry in 2013 range from 4.2 percent on the low side to 16.6 percent on the high side, with most firms coming in between 6 percent and 10 percent. The average of forecasts among the major semiconductor analyst firms is approximately 8.2 percent.”
WSTS also anticipates the world market to grow 5.2 percent to $319 billion in 2014, with healthy mid single digit growth across most of geographical regions and semiconductor product categories, supported by the healthier economy of the world.
Lastly, Forbes said that 2013 will be a turning point for the global semiconductor market.
According to Malcolm Penn, CEO, Future Horizons, the outlook for the global semiconductor industry in 2013 is likely to be +7.9 percent. This means, the global semiconductor industry will likely grow to $315.4 billion in 2013.
Should this happen, it would be significant, given that this is the third year in a row that the market failed to break the $300 billion barrier! The global semiconductor clocked around $292.3 billion in 2012, as against $299.5 billion In 2011.
I asked Malcolm Penn the rationale behind this. He said, the rationale is exactly the same as that for 2012. There is said to be no change to last year’s fundamental market analyses. That’s not all! There are likely to be exactly the same (economic) downside risks as well.
The unit demand, capacity and ASPs are all ‘positively aligned’. Here, it is advised that one should never underestimate the economy’s capacity to derail the chip market. Even the downside forecast has been to break the $300 billion barrier.
The global chip industry growth is driven by four factors. These are economy, which is on hold due to complete loss of confidence, unit demand, which is back on the 10 percent per annum treadmill (inventory gone), fab capacity, which is currently tight (very), especially at the leading technology edge, and ASPs, which are structurally following the usual ups and downs.
There is a very safe, long-term bet, provided companies execute properly. As it is, most firms don’t, as they are too pre-occupied with chasing short-term targets.
Finally, if the year 2013 does show a recovery, the global semiconductor market will likely go ballistic in 2014.
Stoke Inc. is an established player in LTE security, commercial Wi-Fi and LTE enablement, and is already engaged research into small cell signaling issues. It will be displaying a range of solutions for the global telecom industry at the forthcoming Mobile World Congress 2013 in Barcelona, Spain.
Outlook for telecom in 2013
First, I asked Stoke about the outlook for the telecom industry in 2013. According to Dave Williams, CTO, Stoke, 2013 will be the year of LTE globally. Deployments will accelerate worldwide. It is significant that Europe, in particular, has woken up to LTE.
Next, large-scale infrastructure suppliers are experiencing shifts in demand. While operators in the Americas and Japan are high spenders, in Europe there are major vendors whose technology posture is while newer players have become rising stars
Further, Wi-Fi as an ongoing force in the industry – with subscribers accustomed to ‘leaving’ their cellular providers for Wi-Fi options, operator services such as international roaming and rate plans are losing their money-spinning potential. 3G data plan revenues are shrinking because of the superior appeal of Wi-Fi to subscribers. Operators must accommodate this reality in their LTE planning.
Williams added that a trend will be the polarization of the device landscape. The Android’s dream of many device manufacturers with one software interface has faded. We’re seeing a polarized landscape of Samsung/Google versus Apple. RIM is struggling and facing further potential challenges as many of its enterprise contracts approach end of life in 2013. Microsoft may emerge as a player in in the tablet area. Look for some M&A activity from unexpected areas. Also, small cells are seen as the answer to spectrum challenges, but the rollouts will be slow for the next two years as the technology matures.
Finally, driven primarily by the popularity of Apple and Samsung personal devices, BYOD – Bring Your Own Device – to work is a ground-up movement that has taken ID departments and security practitioners by surprise. This is likely to push regulatory measures – especially in the area of security – in the relatively near term. Access providers are under even more threat from the security perspective. It is not all bad, though. For savvy operators, there is the prospect of providing trusted, high quality and easy connections to a large proportion of the estimated 7 billion BYOD users worldwide.
It would be interesting to hear about what are Stoke’s plans for the MWC 2013. Williams said, “At MWC, look for Stoke to announce its new generation LTE mobile border access gateway, new LTE signaling capabilities in its Security eXchange and, on the Wi-Fi eXchange side, a new event access offering in conjunction with an ecosystem of partners.”
Stoke’s Wi-Fi exchange gateway solution
Elaborating on Stoke’s Wi-Fi exchange gateway solution, he said the Wi-Fi eXchange is a gateway application that automatically authenticates Wi-Fi attached subscribers and securely links them to their 3G or LTE cellular network services and/or to the Internet.
Wi-Fi eXchange enables the operators to maximize the benefits of service provider Wi-Fi while limiting traffic loads on the mobile core through dynamic, selective traffic steering. Wi-Fi eXchange is an important catalyst for operators seeking to transition from Wi-Fi as merely RAN congestion relief to Wi-Fi as a new service delivery medium.
On Jan. 23, Stoke announced the newly-available Wi-Fi eXchange gateway that is engaged in multiple commercial service trials uncovering new ways for telecommunications operators to incorporate Wi-Fi as a revenue-supporting service. In a single unit, Wi-Fi eXchange introduces a broad set of extremely flexible Wi-Fi management capabilities previously unavailable to mobile broadband carriers.
Wi-Fi Alliance has been instrumental in driving the evolution of Wi-Fi strategies, providing a forum for Wi-Fi operators, equipment providers and hardware manufacturers to develop industry-wide standards and programs which are critical to mass market adoption. The Passpoint certification program, launched in June 2012, has seen significant industry adoption so far.
Thanks to Sheryl Gulizia, senior manager, Worldwide Public Relations, Synopsys Inc., I was able to connect with John Chilton, senior VP of Marketing and Strategic Development, Synopsys. We discussed the global (and Indian) outlook for the semiconductor industry in detail. Dr. Aart De Geus was apparently away on a business meet.
According to Chilton, the semiconductor industry has repeatedly stared down the daunting technical challenges caused by the necessity of Moore’s Law and the inevitability of the laws of physics. Every time, the industry has risen to the challenge and delivered silicon that is smaller, faster and cheaper, and the design and systems companies that were quickest to exploit the new technologies reaped the great benefit.
Power dissipation challenging
One trend that has proven to be especially challenging is power dissipation. Although transistors get smaller, faster and cheaper, chip power keeps increasing. Increasing power and decreasing size could have caused device-melting energy densities, but the industry rose to the challenge with more innovative physics along with smarter design methods and tools.
This time around, the challenge seems more fundamental, with the new nodes offering either better performance or lower power, but not both at the same time, and maybe not at a lower cost. The fundamental driving factor behind innovation has been smaller, faster and cheaper transistors, with the cheaper part making the migration a no-brainer. Unfortunately, this time the new node is not expected to be cheaper.
App processors to drive move to 20nm
Application processors for mobile and cloud-based services will drive the move to 20nm. These applications have the volume and power/performance needs to justify the expected investment required to embrace the 20nm node. Recent product announcements at CES underscore the emergence of the ‘cloud to mobile client’ trend in consumer electronics.
Dell and Wyse unveiled the project Ophelia. Ophelia is a USB memory stick-sized thin client that will plug into any compatible TV or Dell monitor. The device will boot into an Android OS and turn any TV into a portal to access a computer somewhere else. Ophelia works by taking advantage of the MHL protocol and works with any MHL-enabled display. Over 100-million MHL-compliant chipsets have already been shipped, so the opportunities for this type of interaction are growing.
MHL, along with established standards such as USB and HDMI or even future short-range wireless standards, will enable consumers to plug their cell phone into any monitor or TV and consume content via their phone on a larger, more satisfying display.
Coincidentally, on the same day, Samsung announced consumer displays that utilize voice and gesture recognition. These emerging technologies will begin to redefine the way we interact with the cloud. Instead of carrying a laptop, you may end up waving and talking to a TV. In a futuristic presentation, Lexus showed a prototype of a laser-scanning system that is small enough to be mounted on a grill and makes 3-D maps of the environment surrounding a car. This kind of embedded vision technology will make its way into more devices as processor performance increases.
Chilton said that developing such complex systems and applications require a robust verification solution. Chip designers already use complex and exhaustive test benches to test individual blocks and subsystems. Verification engineers will need to move up to the next level and handle the full verification of the SoC within a target system.
Verification of an integrated system will require an integrated verification solution that includes not just simulation but also acceleration, emulation and formal debug. A new, integrated verification platform should combine these existing discrete technologies to offer the productivity needed to realize complex systems with predictable, manageable schedules.
Delivering the hardware simultaneously with a working OS and development kit will require virtual prototypes, which will be used by software developers prior to the release of working hardware.
How will 2013 turn out to be for the global semiconductor industry? Will there be growth for the global EDA industry? Importantly, how will the Indian semiconductor industry perform in 2013? I asked Jaswinder Ahuja, corporate VP and MD, Cadence Design Systems India these questions.
Outlook for global semicon industry in 2013
First, how is the outlook for global semiconductor industry in 2013 going to be? Ahuja said: “The long term outlook for the semiconductor industry remains positive, with mobility and cloud computing being the key drivers. The global economy is forecast to grow around 4 percent annually through 2016, according to an April 2012 report from the International Monetary Fund (IMF).
“In its June 2012 report, Gartner predicted growth in electronics and semiconductor industries to outpace that of the world GDP growth, at 5½ percent annually to approach $2 trillion for electronics and 6 percent annually for semiconductors through 2016. So, the semiconductor industry outlook remains very positive overall.
“In the near term, multiple challenges will need to be weathered with respect to the global economic climate, especially in European markets. The JP Morgan/GSA Semiconductor Index of Leading Indicators points to a soft semiconductor industry in 2013. However, there are lot of new products in the mobile and tablet space that are driving demand, such as the iPhone 5, Microsoft Surface, and Samsung Galaxy S III.
“The China semiconductor space is emerging as a key market for semiconductor company revenue, and forecasts predict that it will show rapid annual growth rate. The consolidation and M&A activities that we are seeing in the global semiconductor industry also indicate a positive outlook for the upcoming year.
“In India as well, the semiconductor industry will continue to see growth. The injection of funds and other support outlined in the National Policy on Electronics will provide an impetus to home-grown design and manufacturing, which should start gaining traction in 2013.”
Five trends for 2013
What would be the three or five trends likely to be visible in 2013? Ahuja said Cadence sees five big trends that will drive growth in the near and long term. These are: mobility, application driven design, video, cloud and security.
Probably, the most pervasive change in electronics recently has been mobility. When we talk about mobility, it’s just not about smart phones or tablets, but any kind of device which is mobile. Within the mobile space, software applications help system manufacturers and vendors differentiate themselves and stand apart from the competition. The need to have apps on all kinds of devices is driving rapid growth, as well as placing new demands on EDA companies.
The entertainment industry will be the key driver for video, and as the year progresses, we will continue to see more and more products and solutions introduced to tap into the demand. For the semiconductor industry, video will drive growth both in the end consumer market (mobile platforms) and the enterprise space (networking industry).
In many ways, the backbone to mobility is the cloud. With its network servers and infrastructure, the cloud is what delivers much of the content and value to all of those mobile devices. Statistics show that we need one server for every 600 smart phones and one for every 120 tablets. So there is a big need for data centers which can provide support for all the computing and back-end operations.
Security of data in mobile devices and the cloud will continue to be a challenge in the near future. There will be renewed calls to develop products that can protect critical infrastructure and sensitive information from security breaches.