Magma must die

February 8, 2009

Three kids plus one Actually, it doesn’t need to be Magma. I just agree with Isadore that it would be better for EDA if one of the full-line EDA suppliers went away. Magma is taking on the mantle of sick man of the industry now that Mike Fister and his team have moved on and Cadence no longer looks like it is going to implode imminently. Magma announced Friday that it would lay of another 17% of its workforce, on top of a bit more than 10% that went a few months ago.

Magma risks entering the death spiral, where lack of confidence in its ability to invest in next generation tools, or even its ability to survive at all, leads to defections which gradually make its demise a self-fulfilling prophecy. It is the EDA equivalent of a bank run. Magma could survive if they can invest enough in R&D, but it is hard to see how that can come simply from their revenue, and the external investment climate is challenging, to say the least.

Prices for EDA tools are simply too low to adequately fund the R&D that the semiconductor industry requires, as I discussed a few days ago as a sort of “tragedy of the commons.” That overall shortage of investment is aggravated by the need to keep 4 (or 3 depending on whether you count Mentor) RTL to GDSII flows current, which means that the 20% or so of EDA revenue that flows through to R&D is spread thinner because it is spread across that extra group.

Posted by Paul McLellan on February 8, 2009 | Comments (7)

March 29, 2010

In response to: Magma must die
Panther commented:

I read a article under the same title some time ago, but this articles quality is much, much better. How you do this?

March 24, 2010

In response to: Magma must die
electro commented:

It is useful to try everything in practice anyway and I like that here it's always possible to find something new. :)

February 10, 2009

In response to: Magma must die
harry the ASIC guy commented:

Paul, I really enjoy your blog, especially your insights into the EDA world as a veteran of EDA. However, I think this latest post is out of character for you. Of course, many of us who were in EDA for a long time (in my case, 15 years) understand the challenges that Magma is having trying to survive as #4. It's very difficult and many have not been able to penetrate the top 3 without being chopped up and/or acquired (Viewlogic, Avant!). Still, I think your sensationalized headline (designed to garner attention, no doubt) and predictions of inevitable doom for Magma sound like the FUD that might have come from competitors marketing departments. And your article, no doubt, will be used as such. I have no personal interest in Magma myself, so I'm not speaking on my own behalf. But I think Magma deserves to have a fair chance at regrouping and saving itself without an extra push off the cliff.

February 9, 2009

In response to: Magma must die
info@allabouteda.com commented:

Well, it's been almost a year since Rajeev said there would be only two large EDA companies in 5 years (see tinyurl.com/d2pypz ) He's just trying to make his prediction come true, is all.

February 9, 2009

In response to: Magma must die
Meredith Poor commented:

My sisters used to look at me with that 'drop dead' expression too!

February 9, 2009

In response to: Magma must die
Daniel commented:

Even with just three public EDA companies the tool buyers will still have enough leverage to demand rock-bottom prices. www.marketingeda.com

February 8, 2009

In response to: Magma must die
krylov-subspace commented:

Magma did all mistakes that a company should not do. Like trying to do another ATPG tool before ignominiously being forced to exit the space. Magma had one sympathetic customer that was TI Wireless. Even they have gone back to Synopsys. How does it matter only the poor engineers will not find other jobs. They should have stayed in their previous jobs and not joined Rajeev's company. He has ensured the group of 6 have upgraded their golden parachutes before the shop shuts down. Magma salaries for operations people were too high. Its time for employees to ditch Magma and look for a job outside EDA.

About EDN | Site Map | Contact Us | Subscription | RSS

POST A COMMENT
Display Name

Before submitting this form, please type the characters displayed above. Note the letters are case sensitive: