Just got back from the EDA Consortium’s annual EDA CEO Forecast and for the most part the CEOs seemed particularly gloomy when it came to revenue forecasts for the year. In brief, the CEO’s didn’t offer any forecasts but Mentor CEO Wally Rhines, whose company is in a quiet period and thus could not give a prediction for EDA industry growth in 2008, pointed to a report from one of the financial firms that showed a historic correlation between semiconductor R&D expenditures and EDA revenue for the last several years. If the correlation holds true to form, the analyst report extrapolates that the EDA industry will only grow 2% in 2008. None of the CEOs on the panel disputed that number.

It is worth noting that Synopsys’ CEO Aart de Geus could not offer a prediction because like Rhines his company is in a quiet period and has yet to report its quarterly earnings.

It’s also worth noting that de Geus didn’t seem downbeat. And after the CEOs fielded a rather glum stream of questions from the moderator and from audience members, one of whom took Mike Fister to task for Cadence’s recently glum earnings call and pointed out that Synopsys now has a higher Market Cap than Cadence, de Geus said:

“This dialogue has been bizarre because most of the questions are loaded with doubt that we can provide any value. I think the reason is that we are actually in the midst of a transformation of what is the value we are providing. The question ‘How can they even design something just by using IP?’ The whole point: the iPod has no new interesting IP whatsoever but it is an incredibly successful product…but the fact is if the Lego blocks are the next big building blocks, you can build much bigger castles.”

Indeed it will be interesting to see who makes it…lots of challenges ahead—lithography, variability, power/thermal, side effects of new materials, software for multi-processors, how long will CMOS scale???...lots of challenges ahead for EDA…lots of opportunities.