Cadence pitches homegrown EDA industry for India’s chip design push | Company News

Cadence Design Systems is pitching to the Indian government to build a vibrant homegrown electronic design automation (EDA) industry in the country if it wants to become a big player in the global semiconductor sweepstakes.

Why is Cadence pitching for a homegrown EDA industry?

Currently, Indian chip design companies import most chip design software tools from Cadence, Synopsys and Siemens, which are the global leaders in this space. Globally, it is a $16-21 billion per annum industry and is expected to hit $43 billion by 2035, based on industry estimates.

Elaborating on the plan in an exclusive interview, Cadence India Managing Director Alok Jain said: “If your ambition is to become a big player in the semiconductor space, India needs to have a balanced ecosystem from design, verification, IT, talent, manufacturing, packaging and product development. This includes a homegrown EDA industry. Many countries are developing their own EDA tools and there are a lot of startups already making EDA tools. So there is no reason why India cannot start an EDA industry, especially as it does not require too much capital investment.”

EDAs are specialised software that form the backbone of modern chip design. Microchips contain tens of billions of tiny transistors packed in a space smaller than a fingernail. It is impossible to physically draw or plan these connections by hand. EDA software tools automate the entire process.

Jain, however, said the process would take time and Cadence would have to figure out a model to support such a move with the government, which could include consultancy support.

Cadence is also betting on agentic AI-powered EDA tools, which are set to become the next big cutting edge for the business.

“AI will change the landscape, leading to much higher productivity and efficiency in chip designing. For instance, our design and verification agent has given a 25x speed-up in verification,” Jain said.

But the adoption of AI-enabled EDA tools among Indian startups and smaller companies faces major challenges.

Jain acknowledged: “EDA tools are expensive, chip design is an expensive process. Getting the right talent is a problem. Out of the 370 homegrown semiconductor design startups, only 11 per cent are funded. So small companies won’t have millions of dollars to buy EDA tools.”

Jain suggested an alternative model. “We have to look at different models like pay-per-use or EDA tools in the cloud, so you don’t need to spend on your own infrastructure,” he said.

Cadence depends heavily on India for talent, with as much as 30-40 per cent of the company’s global workforce based in the country. But Jain pointed out: “There is a lot of junior- and middle-level talent in the country, but the problem is in getting people in senior posts.”

Responding to the challenge faced by chip design startups in securing venture capital funding, Jain said: “There is a product mindset and a services mindset. While that is changing, much more needs to be done. Startups have to define their product, make the product, be able to sell the product and figure out the market. That is the skill set that is growing, but a lot more work has to be done in this space.”