Outlook Brightens for Desing Automation Firms / Increased Manufacturer Capital Spending to Spur Growth and Widespread Use of Design Automation

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The pickup in capital spending in the nation's manufacturing sector is expected to help design automation companies, according to several analysts of this growing computer field.

Design automation involves the conceptual design, logical design, testing, modification, evaluation, manufacturing and engineering of new products with the aid of a computer.

Among analysts, some of the favorite companies are Integrated Computer Graphics Inc., Autodesk Inc., the Macneal-Schwendler Corp. and the Mentor Graphics Corp.

``Attaining wide acceptability in the workplace in the mid- to late 1970's, design automation has become an increasingly used tool for industries including automotive, architectural, engineering and construction,'' said David Korus, an analyst with Kidder, Peabody & Co. ``Spurring the growth and widespread use of design automation has been the obvious gains generated in productivity and manufacturing efficiencies.''

Design automation companies have had their share of difficulties, however. Competitive pricing pressures on hardware systems have often squeezed profit margins, forcing some companies to become software suppliers.

According to Korus, the shift toward software will have a major positive effect on the industry as design automation companies seek to develop other services to offset the decline in hardware prices.

Several of the companies are expected to benefit from the increasing demand for computer-aided design, computer-aided manufacturing and computer-aided engineering systems.

One such company is Integrated Computer Graphics, based in Atlanta. It designs, licenses and supports an automated system for the $150 billion wood-frame construction industry, enabling home builders to ``construct'' a house electronically on a computer screen.

The system is said to provide users with flexibility in design, greater accuracy in pre-construction cost projections and better control over spending for labor and materials.

According to Stephanie Haggerty, research director at Marshall & Co., a brokerage firm with headquarters in Atlanta, Integrated's rapid growth is fueled by ``the unlimited marketing opportunities it has with more than 90,000 domestic home builders, many of which currently have little or no computer capability. …