Synopsys Plus Virage: Combinatorics Or Common Sense?

By Jack Harding
It should be no surprise. The industry has been consolidating and expanding and consolidating for nearly 40 years. So when Virage Logic was gobbled up by Synopsys and Denali was ingested by Cadence, it is really a lot more of the same. Or is it?

There is a difference. Synopsys has made it crystal clear that its definition of EDA now permanently includes IP. Not that acquiring Chipidea from MIPS was dabbling but, let’s face it, that deal—rumored to be in the low tens of millions price range—could have been construed as a bargain too irresistible to pass even if IP was not going to be mainstream.

That’s history. EDA is now and forever defined as tools to design and stuff to design around. After all, we just acquired tiny but formidable Silicon Design Solutions to have a large Asian footprint from which to grow, and along the way now find ourselves in the custom, dense memory IP business. That the piece, by the way, that Virage never wanted to do–the custom compilers and instances. Even the value-chain provider model includes IP and there’s no going back. The customers are asking for it, and we intend to acquire more.

With the rare exception of ARM, Rambus and Virage (and a few others), IP has been a bad business. IP needs the leverage of other value propositions and channels that it now seems to be getting; tools from Synopsys and chips from us.

So, for us, we now find ourselves in the interesting… and not yet enviable…position of selling the one piece of memory IP Synopsys doesn’t have. Brilliant strategy? Nah. Like most things in Silicon Valley “brilliant strategy” is just the folklore that gets retro-scribed after dumb luck serendipity.

Don’t get me wrong. We are thrilled with our SDS deal. But, let’s face it, we had no way of knowing we would end up with the one piece of IP Synopsys doesn’t sell or want to sell…so far.

What’s next? Well, we can expect Synopsys and Cadence to make a run at every private or low-market-cap IP company. The bet has been made and there is no backing out now. The only question is how far will they go. Is there an ARM/Synopsys deal on the horizon? While it can’t be imminent, for reasons ranging from ego to ecosystem, for the first time it’s not out of the question. (If you doubt that just look at the rollup of the foundry business and the inevitable two and only two sources of CMOS wafers.)

The question now is whom do you trust?

–Jack Harding is the chairman and CEO of eSilicon.