Software systems that assist in the development of complex electronics at all levels of the design hierarchy. These range from tools that assist with top-level conceptual and design issues down to those dealing with the fine placement and layout of transistors and wiring. At the highest level design automation involves system modelling, which generally makes use of graphical tools to construct block diagrams that capture the system architecture. There are also tools such as silicon compilers that can translate high-level system and behaviour descriptions into low-level circuit detail, a process known as hardware compilation. Lower-level logic and circuit design languages such as VHDL and Verilog are also supported. A key stage in any design process is the netlist, which for modern designs can be extremely large and complex. Tools for netlist synthesis, which can generate a netlist automatically, are widely used. One strong trend in system design facilitated by automation is the use of predesigned complex hardware systems, known as IP cores, that can be purchased from vendors. Such Intellectual Property cores can include memory arrays, IO interfaces, and even entire CPUs.

There are also a number of tools to check the correctness of design artefacts. Software simulators are available at every level, ranging from those that can simulate system behaviour, through those that simulate logical behaviour at the netlist level, to simulators for integrated circuit behaviour at the transistor and wire level. At the integrated circuit level there are also design rule checkers, which ensure that the dimensions and layout of circuit elements satisfy design rules, so that they can be manufactured properly. Software tools are also available that can connect to automated test equipment used to ensure that chips emerging from a production line have been manufactured correctly. An alternative approach to testing is formal verification, which uses mathematical models of behaviour, logic, and circuits in order to produce proofs of correctness.

Effective design automation requires that all the various software parts, at each different level, are able to communicate together effectively. This means that most design automation tools consist of a large suite of programs, and it is chiefly for this reason that the market is dominated by three large companies: Cadence, Mentor Graphics, and Synopsys.