hi pintuinvlsi,
the netlist that vlsitechnology is referring to is a gate level netlist (after synthesis)
not rtl netlist (behavior code). Agree, rtl netlist is most likely hierarchical, but for gate level netlist (after synthesis)... it can be either hierarchical netlist or flatten netlist.
why can you not flatten the netlist after synthesis? place & route tools are smart enough to accept both hierarchical gate-level netlist and flatten gate-level netlist.
it really doesn't matter to the eda tools.
the only reason why hierarchical netlist would be chosen is for human read-ability and debug purposes. in fact, magma tools, you can read in hierarchical netlist and still flatten the netlist (physically), and still keep the hierarchical netlist( (logical). in other words, you still have both forms of netlist, hierarchical and flatten in one data base. i hope that wasn't confusing.
in the place & route tools, if you don't flatten the netlist, you wont take advantage of the cross boundaries optimizations.
hope this helps.
-Tony