Synopsys To Buy Virage Logic

Synopsys expands its push into standard IP with logic, memory and ARC processor.

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By Ed Sperling
Synopsys bought Virage Logic today for $289 million, extending its IP portfolio well beyond just standard I/O and PHY into memory, logic and processor cores.

The move strengthens Synopsys’ position as an all-in-one powerhouse with IP that can fit into an integrated flow.

“A big part of the value is providing building blocks that work through the SoC flow,” said Joachim Kunkel, senior vice president at Synopsys. “We started out providing interfaces and PHY and then added common analog functions. Now we’re adding embedded memory, which is required by many chips to help with cost reduction.”

Synopsys has always had a tight working relationship with ARM. Kunkel said the acquisition of the ARC processor will not affect that relationship.

“SoCs typically have a main CPU, which is a multiprocessing slot occupied by ARM, MIPS or IBM’s PowerPC. Then they do other processing with another processor to offload the main CPU for things such as audio. That’s where ARC fits in. It is an ancillary processor offloading the CPU.”

All of the large EDA vendors have been looking for adjacent markets to help grow their top-line revenue and their bottom line profits as the number of players developing advanced chips remains flat to slightly down. While those chips are certainly more complicated, there are fewer design starts at the front edge of Moore’s Law.

IP is one such adjacent market. “Our role is to solve the issue of complexity in designing an SoC,” said Kunkel. “One side of this is the tools. The other is the basic building block to reduce cost and reduce risk.”

Synopsys’ IP and systems business has been responsible for about $200 million in revenue per year and represents about 13% of the company’s portfolio, including the recent VaST and CoWare acquisitions. Virage will increase that percentage by a significant amount once the deal closes in Q4.

Both boards have agreed to the terms of the deal, which is $12 per share for Virage stock, or $315 million. Virage has roughly $26 million in cash, making the net price about $289 million.