Semiconductor IP News and Trends Blog

Was IP Key to Synopsys-Magma Deal?

Bucking popular trends, Synopsys’s interest in Magma is driven more by R&D talent and existing customer base than semiconductor IP.

It’s easy to think that the only reason for acquisitions in today’s electronics market is to acquire semiconductor and software IP as a shield against patent trolls. The recent acquisition of Magma Design Automation by Synopsys is refreshingly different. It is the acquisition that proves (tests) the rule.

Magma was never a big player in the semiconductor IP market. The company offered customers little if any IP of its own. Instead, the company worked with third-party IP providers to qualify their IP into the Magma design flow.

So why should Synopsys wish to purchase number four in the list of EDA’s top tier companies?

Synopsys’s CEO Aart de Geus said that the Magma acquisition was an opportunity to expand his company’s R&D talent pool, not to acquire any one particular product. He also stressed the importance of established customers – presumably in markets where Synopsys needed to gain visibility.

To acquire a company for its R&D talent pool and employee base is not a new concept. In fact, it is refreshingly old. De Geus expanded upon this point by noting that, in the EDA space, know-how proceeds much faster than the patents.

Still, long time EDA analyst Gary Smith has said that the acquisition of Magma does have a product play, specifically in the analog custom IC tool space. Smith’s comments make sense, as Synopsys has shown continued interest in growing its analog expertise. For example, in 2009, the company purchased the Analog Business Group of MIPS Technology. Some may remember that, in 2007, MIPS had acquired its analog and mixed-signal IP expertise from the purchase of privately-held Chipidea Microelectronica.

What will be the end result of this acquisition in terms of semiconductor IP? If Synopsys can successfully integrate Magma’s analog and mixed signal tools, then it may offer a real challenge to Cadence’s dominance in the analog chip design space. But that may prove to be a big “if.”