Microchip tool industry could consolidate: Cadence

BANGALORE (Reuters) - Companies that make software for microchip design are likely to consolidate to boost efficiency in serving semiconductor makers, according to Silicon Valley-based Cadence Design Systems.

"I think the industry is going to have that happen," chief executive Mike Fister said, responding to a question on industry consolidation after addressing members of the Indian Semiconductor Association late on Thursday in Bangalore, where dozens of chip design firms have engineering centres.

Cadence competes with Silicon Valley rival Synopsys Inc and Wilsonville, Oregon-based Mentor Graphics Corp.

Fister said chip design may go the way of business software, in which US giant Oracle and Germany's SAP have become aggregators of a variety of software for corporate activities like payrolls and inventory management.

With computers, network gear, mobile phones and a host of home products carrying semiconductors, chip makers need to be flexible and fast to meet customer requirements on features and costs.

Semiconductor firms will want more automation of repeatable, monotonous processes so they can focus on design, requiring partnerships and consolidation among vendors, Fister said.

Tool makers now partner with others to help customers, who want to have fewer suppliers with deeper relationships, he said.