Abstract: We ask whether AI agents powered by locally deployed large language models can reliably automate expert-defined hardware design workflows in an industry-realistic tool-calling setting. In these environments, engineers issue repetitive, dependency-ordered operations—such as creating components, adding ports, and wiring connections—through specialised tools. Confidentiality constraints on component specifications and naming conventions often preclude hosted proprietary APIs, motivating the use of locally deployed models. To study this setting, we build a Model Context Protocol (MCP) server that reproduces the state and dependency logic of a proprietary hardware design tool used in embedded system development and construct a benchmark covering single-operation edits, multi-step dependency chains, invalid requests, misspelled prompts, and multi-server tool contexts. We evaluate seven open-source models comparing pipeline choices including system prompts, tool-description detail, context scope, and single-agent versus multi-agent architectures. Results show that strong models can achieve near-complete expected-call coverage on the benchmarked workflows, but reliability depends strongly on both task structure and agent configuration. Comprehensive tool descriptions consistently reduce failures, few-shot prompting can cause severe inaction for some models, cumulative context harms constrained models, and multi-agent decomposition helps weak workers or long sessions at the cost of additional calls. These findings provide practical guidance for deploying local LLM agents in stateful hardware design environments.
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