CEO Perspective – A Call for Participation Grant Pierce, President and CEO, Sonics, Inc

First, let me say I am extremely honored and proud to have been selected by the ESD Alliance Board of Directors to serve as Chairman. This is a tremendous opportunity to promote the role of the ESD Alliance in advancing the electronic system design ecosystem.

These are exciting times our industry. At the ESD Alliance CEO Outlook Panel in April, the “big 4” CEOs shared very positive outlooks on the future of the industry. Machine learning, automotive and the industrial Internet of Things (IoT) are part of what the panelists see as key drivers for electronic system design. Aart de Geus (Co-CEO of Synopsys) commented “the hunger for silicon is going to be boundless.” Simon Segars (CEO of ARM) added that this is an opportunity that doesn’t have to come from the big semiconductor companies. Wally Rhines (CEO of Mentor, A Siemens Business) pointed out “people who never did designs before are now designing chips.” Lip-Bu Tan (CEO of Cadence) feels the industrial IoT is a huge opportunity to drive performance and productivity.

What does this mean for the electronic system design industry and the ESD Alliance?

The common ground at the CEO Outlook was there are many new opportunities that will continue to expand the design ecosystem in the coming years. However, with these new opportunities come new challenges, technical and business. For years, performance was the key constraint for many IC designs. As the demand for “smarter silicon” grows in new applications, other concerns such as cost, power, reliability and security become equally, if not more, important. Addressing these concerns will require new tools, IP, and expertise.

As the panelists suggested, there will be opportunities for large and small companies to address these new challenges. While it is important for companies to remain focused on the technical aspects of their product development, there are many common issues which can affect the road to success. Two examples, highlighted in the Export Supplement, are Alliance members Helic and SoC Solutions realization that ignoring the complex export regulations affecting the industry could be a serious and costly error. The ESD Alliance’s Export Committee was willing and able to help, saving both companies substantial costs while allowing them to expand with confidence.

The ESD Alliance committee updates (pages 3 & 4) provide a snapshot of some of the ongoing activities addressing common, industry-wide issues. The committees meet as needed to discuss and resolve common issues, presenting some unique opportunities for members.

Most of the major ESD Alliance events such as the aforementioned CEO Outlook include time for networking. This opportunity to meet and talk with industry peers, an important part of the Alliance activities, extends to the committee meetings as well. Committee members have the opportunity, either during the meetings or via follow-up emails, to discuss approaches to common issues with like-minded peers. These informal discussions about common concerns allow each company to focus resources on their key technologies.

This important additional member benefit is available to all who choose to actively participate in one or more committees. At Sonics, we do participate in the committee activities, allowing us to contribute to the common good as well as benefiting from others with similar experiences. As chair of the ESD Alliance board, I encourage companies to join and actively participate in the ESD Alliance.

For more information about the ESD Alliance and the benefits of its many initiatives, visit esd-alliance.org.

ESD Alliance Welcomes New Members CAST and SOC Solutions

CAST develops, sells, and supports semiconductor IP (intellectual property) for electronic system designers. Engineers use its pre-designed and pre-verified IP Cores and Platform IP products to save development time and

add functionality beyond their areas of expertise. IP from CAST enables the design reuse methodology as a means for handling rising design complexity and decreasing time to market.

SoC Solutions enables next-generation Internet of Things (IoT) and Machine to Machine (M2M) silicon devices by supplying intellectual property (IP) and services to build innovative “connected” products. Its experienced application specific integrated circuit (ASIC) and embedded software developers have experience designing systems on chips (SoCs) with embedded microprocessors, crucial to building small connected smart chips. SoC Solutions’ re-configured IP subsystems have been used in numerous ASIC, SOC, FPGA and structured ASIC designs.

The CEO Outlook Returns!

The semiconductor design ecosystem came out in force Thursday, April 6, for the return of the CEO Outlook at Synopsys in Mountain View, Calif. It was a great crowd and an exceptional panel moderated by Semiconductor Engineering’s Ed Sperling. Thanks to Lip-Bu Tan of Cadence, Wally Rhines from Mentor, ARM’s Simon Segars and Aart de Geus at Synopsys for their insights and a lively discussion.

Our special guests that night were from the Dwight D. Eisenhower School for National Security and Resource Strategy, part of the National Defense University (NDU). The ESD Alliance hosts a yearly visit from the NDU students and organizes meetings with noted semiconductor companies in Silicon Valley. NDU plays a vital role in educating future government leaders on the semiconductor design and manufacturing industries.

Since a picture is worth a thousand words, let’s let the photos tell the story. Video from this informative evening is available for Alliance members on the ESD Alliance web site. Visit esd-alliance.org for more photos and video.

Ed Sperling, Lip-Bu Tan, Wally Rhines, Simon Segars and Aart de Geus discuss the future of the electronic system design industry.

Aart de Geus talking with students from the National Defense University prior to the panel session.

ESD Alliance Board Chair Grant Pierce of Sonics with Alliance board members Wally Rhines and Simon Segars, and William Deley of ARM

NDU student Lt. Colonel Jeffrey Howell (US Army) asks a question during the panel session.

Bob Smith with Paula Jones of Cadence, Michelle Clancy of Cayenne Communication and Kevin Moynihan of Cadence.

Grant Pierce, ESD Alliance’s Julie Rogers, Wally Rhines, Aart de Geus, Paul Cohen of the ESD Alliance and Larry Disenhof, Cadence.

Committee Updates

Export (Larry Disenhof, Cadence). The Export Committee continues to monitor government activities and rulings that might have a significant impact on your business.

Following up from our last newsletter, the U.S. Government settled charges with ZTE, issuing fines totaling close to $900 million due immediately, and $300 million in reserve for seven years, holding ZTE to account if it has future violations. In addition to the monetary fines, ZTE will be subject to annual compliance audits, and must take other proactive steps. This after its senior management was replaced due to its extensive violations - a fascinating case that will be taught in law schools for years to come. This sanction on ZTE affected many EDA companies and our

customers, all suppliers to the company. We can now resume business without needing a special export license exception.

In other news, although lots of webinars and seminars are taking place concerning changes to export regulations in the Trump Administration, no policy changes have been made that would directly affect us. The various sanctions programs in Russia, Iran and Cuba continue, and will continue for the foreseeable future.

In late May, the new Undersecretary of Commerce for Export Administration was confirmed by the Senate nominating committee. Mira Radielovic Ricardel has an extensive career in the national security arena, both in government and industry positions, most recently at Boeing. (This appointment is pending Senate confirmation at press time.) Also, Richard Ashooh was nominated to be Assistant Secretary of Commerce. A director at the University of New Hampshire, Ashooh was formerly employed in a government relations role at BAE Systems. It’s yet to be determined what changes to the dual-use Bureau of Industry and Security program these military-focused individuals will bring. We continue to carefully monitor developments.

ESD Alliance member companies who need more information regarding these or other government issues potentially affecting your business should contact us.

License Management & Anti-Piracy (LMA) (John Harms, Mentor, A Siemens Business). At DAC in Austin this year, the LMA Committee participated in the annual meeting with CELUG (Centralized Enterprise License Users Group). CELUG includes representatives from most of the enterprise-level consumers of Electronic System Design tools. This meeting provides an excellent opportunity for Alliance members to meet face-to-face with their mutual enterprise licensing customers. Each year, the LMA Committee takes advantage of the DAC/CELUG event to hold a face-to-face committee meeting. In addition to meeting with a key licensing technology provider, this is a valuable teambuilding opportunity for committee members to get re-acquainted in formal and informal conversations.

This quarter, the LMA and CELUG groups completed a survey covering customer usage of operating systems, common licensing utilities, etc. The survey results are being presented to CELUG members during DAC.

Regarding the ongoing server cloning issue, the team is continuing discussions with ESD Alliance's counsel regarding the legal framework for members to work collaboratively on a common solution. One benefit of the legal agreement is to assure there are no crossed expectations regarding ownership of jointly developed functionality; another is well-defined conflict resolution. In related developments, two small sub-teams were formed; three members each from the LMA Committee and CELUG. The two sub-teams will meet as part of the DAC/CELUG event to discuss how customers will interact with remedies for license over-usage via server cloning.

Interoperability (Stephanie Chou, Keysight Technologies). The annual OS vendor review meeting was held in April. Key OS vendors such as Red Hat, SUSE and Microsoft, as well as OpenText (a remote desktop tool vendor), presented their respective roadmaps to the ESD Alliance members. The ESD Alliance OS roadmap has been recently updated to reflect the current status of common operating systems supported by many members.

Much of the software used by the electronic system design community is licensed by the Flexera FNP licensing technology. Knowing the versions and the schedule of the FNP deployed by the key software vendors help our users plan for their upgrade of the FNP servers. As such, we have added the FNP deployment chart to the Interoperability

page on the ESD Alliance web site.

As always, you can find the latest OS Roadmap update on the ESD Alliance web site, esd-alliance.org.

Market Statistics Service (MSS): (Paul Cohen, ESD Alliance). The ESD Alliance’s MSS report captures EDA, semiconductor IP and services revenue data reported in complete confidence by companies providing these products and services and organizes it into a published report available to members. The most recent report, covering through Q4, 2016, shows quarterly industry revenue up 18.9% compared to Q4, 2015 on revenues of $2.5 billion, the highest quarterly revenue increase in five years. The report includes historical revenue data by quarter organized by detailed product categories and geographic regions. The report provides valuable data to help guide member companies’ business decisions. An overview is available in the MSS Newsletter, available at esd-alliance.org.

Emerging Companies (Steve Pollock, AiPac, Inc.). The Emerging Companies Committee continues to hold informative events on topics of interest to the electronic design ecosystem. We are busy planning several events for the fall, including new installments of the legal series and the popular Jim Hogan emerging companies series. Check the Alliance web site, esd-alliance.org, for details!

Recordings of past events are available in the ESD Alliance media library.

Tradeshow (Graham Bell). The committee represents the interests of ESD Alliance companies at the Design Automation Conference (DAC) and Design Automation and Test Europe (DATE).

DAC was a great showcase for ESD Alliance companies and their products, as well as an opportunity to hear a wide variety of technical papers. This year, DAC added a new research topic, “Enabling Advanced Wireless Technologies.” The 54th DAC was held in Austin, Texas, June 18 through 22.

DATE 2018 will be held March 19-23, 2018 in Dresden, Germany. The 21st DATE conference and exhibition is the main European event bringing together designers and design automation users, researchers and vendors, as well as specialists in the hardware and software design, test and manufacturing of electronic circuits and systems. It puts strong emphasis on ICs and SoCs, reconfigurable hardware and embedded systems, including embedded software.

IP (Warren Savage, Silvaco) The IP Committee continues to support the IP community with its support of events and other educational forums.

On Monday, June 19 in the ChipEstimate booth at DAC Warren discussed the application and benefits of IP fingerprints that allows IP companies to protect their products and semiconductor customers to insure they are in compliance. On Tuesday, June 20, the ESD Alliance was a sponsor of the 5th annual Stars of IP party at the Speakeasy nightclub in Austin.

Following a successful launch in 2016, look for two REUSE events in 2017. The first is in Shanghai on August 30, followed by Silicon Valley on November 30. Additional details will be available at the-core-store.com and esd-alliance.org.

Robert M. Gardner

Robert (Bob) Gardner died April 11 at the age of 74 after a short illness. Bob served as the executive director of the Electronic Design Automation Consortium (EDAC), now the Electronic System Design (ESD) Alliance, from 2007 until 2015. He was a member of the DAC Executive Committee for many years. An avid musician, Bob could also be seen performing at DAC events, including the Sunday welcome and the Monday exhibit opening. In 2016, Bob received the DATE Fellow Award by the Design Automation and Test in Europe (DATE) Conference and Exhibit in recognition of his long association with DATE.

The ESD Alliance –– Where Electronics Begins The ESD Alliance newsletter is a publication of the ESD Alliance. For more information, visit: esd-alliance.org February 2017. Volume 4, Number 2 Electronic System Design Alliance, 541 Jefferson Ave, Suite 100, Redwood City, CA 94063. Phone (408) 287-3322 Executive Director Bob Smith Board of Directors Chair Grant Pierce, Sonics, Inc. Directors Aart de Geus, Synopsys, Inc Dean Drako, IC Manage Amit Gupta, Solido Design John Kibarian, PDF Solutions Lucio Lanza, Lanza techVentures Grant Pierce, Sonics, Inc. Walden C. Rhines, Mentor Graphics, A Siemens Business Simon Segars, ARM Lip-Bu Tan, Cadence Design Systems

Editor Paul Cohen Contributors Graham Bell, Uniquify Stephanie Chou, Keysight Technologies Paul Cohen, ESD Alliance Nanette Collins, Nanette V. Collins Marketing & PR Larry Disenhof, Cadence John Harms, Mentor Graphics, A Siemens Business Steve Pollock, AiPac Julie Rogers, ESD Alliance Warren Savage, Silvaco Bob Smith, ESD Alliance

Jim Bruister

Encryption Guidelines Modified through Export Committee Efforts Anyone who doubts the value of the ESD Alliance or its Export Committee won’t after learning that the three-person group took on the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and won.

Yes, consider the Export Committee formidable. Made up of representatives from Synopsys, Mentor and Cadence, it was able to persuade BIS to change a small but important piece of the Encryption and Export Administration Regulations. “In our EDA world, we

have one main exemption that my committee gained for the industry back in 2005 –– decontrolling our usage of encryption in the design cycle,” says Cadence’s Group Director of Export Compliance and Government Relations Larry Disenhof, the chair of the Export Committee. “Only in the last year has the main body of encryption regulations caught up with our exemption fully decontrolling ancillary encryption used in products from DVD players and household appliances to protection of IP in electronic design,” he added. “Without this exemption, we would have been filing license applications constantly for the last 10 years.”

That insight well served SoC Solutions of Suwanee, GA., supplier of IP and services to build innovative “connected” products and a new member of the Alliance. While networking events and the SIP Working Group were CEO Jim Bruister’s reasons for joining, his perspective changed once Disenhof answered his questions about cryptography export.

Specifically, Bruister wondered about the guidelines related to exporting advanced encryption standard (AES) cores to foreign countries. And as he did with Helic (see following page), Disenhof was able to help. He sent a link to the BIS website chock full of information on Encryption and Export Administration Regulations. “The encryption category has a wide range of carve-outs,

exceptions and licensing or reporting requirements that can be opaque,” cautioned Disenhof. He further advised SoC Solutions to study the regulations carefully and perhaps consult with an export attorney.

Bruister was impressed with Disenhof’s practical advice. “Larry pointed me to the Category 5 part 2 that speaks to encryption as part of a design. Because our project schedule is quite tight, we decided not to put our AES core in the design. The main reason is due to having to file a license to have AES in a chip that can be exported. When we get to that point, we will get an export lawyer to review and file.”

The outcome for SoC Solutions may have been different without the ESD Alliance. “This guidance is quite valuable to a small company such as ours. We don’t have lawyers on staff so it helps us evaluate before contacting a lawyer. It saves us money.”

ESD Alliance Export Committee Hosts the National Defense University Eisenhower School

For more than 10 years, the ESD Alliance Export Committee has hosted the Electronics Industry Studies students from the Eisenhower School at the National Defense University during their annual visit to Silicon Valley. The goal of the students in this graduate level program, representing all branches of the military and key civilian agencies, is to better understand the complex issues surrounding the electronics system design industry. In April, the students heard presentations from several ESD Alliance members as well as other

Silicon Valley companies, and had the opportunity to attend the ESD Alliance CEO Outlook.

After a long day of technical and business presentations, the students learned more about the history of Silicon Valley at an informal evening hosted by the Alliance and the Computer History Museum.

Yorgos Koutsoyannopoulos

Helic’s Yorgos Koutsoyannopoulos (L) and Anand Raman (R) with Ted Miracco (C), CEO of Alliance member SmartFlow Compliance Solutions at the recent CEO Outlook panel.

The ESD Alliance’s Export Committee Comes to the Rescue

The level of detail of U.S. export rules and regulations can be confusing and easily misinterpreted, especially when regulations are specific to a country, an industry or an application. Even emerging companies or startups need to be aware of export rules and restrictions because the penalties for not following the rules can be harsh.

No company wants to get it wrong, as Helic’s Yorgos Koutsoyannopoulos is quick to attest. Helic is a 17-year old company in Santa Clara, Calif., that provides cutting-edge software used throughout the semiconductor industry to analyze electromagnetics and provide cross-talk verification and signoff. These tools address the needs of high-performance, high-speed system-on-chip (SoC) designs destined for cloud infrastructure, IoT, RF and automotive applications. Large SoCs verified by Helic’s tools –– think multi-core CPUs, GPUs, giga-bit transceivers, FPGAs and high-speed memory blocks –– reside in server farms used for cloud computing. While 55-70% of Helic’s business is in the U.S., its customer base is widely dispersed throughout the world in design centers in Europe, Israel, Japan, China, Korea and Taiwan. Helic is a new member of the ESD Alliance and here’s where the story gets interesting. Even with a growing customer base worldwide, it wanted to expand to other regions of the world. Over a couple of years, Helic began marketing its solution on a global basis and a few months ago had a business opportunity with a customer in a new territory. As the relationship got more serious and striking a deal imminent, Helic executives, not being experts in export laws, began to wonder about the U.S.’s export restrictions knowing that ignoring them could cause irreparable damage to the

company. They needed help interpreting the law, such as whether standard export control provisions allow for the export of software to this new territory or to any specific company or individual. The ESD Alliance was able to assist. Koutsoyannopoulos, Helic’s president and CEO, approached the Alliance’s Executive Director Bob Smith. Smith, in turn, put him and Helic’s Corporate Secretary Selini Valiakas in touch with Larry Disenhof, group director of Export Compliance and Government Relations at Cadence and long-time chair of the Alliance Export Committee. Disenhof was able to help and help he did. Within 24 hours, he responded with a long, well-organized and savvy answer explaining best practices in dealing with export rules and compliance. “We wanted an opinion and were extremely pleased by the quality and amount of information in the form of precise, practical guidelines,” says Koutsoyannopoulos. “A brief but precise

interpretation of the law and restrictions guided us through the negotiations.” In the lengthy email, Disenhof included links to useful websites and other sources of information. The result, notes Koutsoyannopoulos, meant that Helic could forgo hiring an expert attorney for legal advice, a saving of between $10,000 and $20,000 on lawyer’s fees. “Easily,” he added. “This is not something simple and it changes daily. Someone traces the changes every day and tracks the guidelines. It’s as complex as taxes.” As he points out, the level of detail of export rules and regulations is massive. Koutsoyannopoulos today is pleased Helic joined the ESD Alliance. He is an enthusiastic supporter and finds its programs and initiatives valuable. “The obvious is that it’s a club of companies promoting the industry. However, there are many volunteers in its committees who provide very valuable input. That’s the biggest value of the ESD Alliance.” And yes, Helic successfully closed the business deal in this new territory without a hitch, thanks to Larry Disenhof and the ESD Alliance’s Export Committee. Its tools have been implemented into the production flow and the first of many SoC designs is in development.