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Cadence gobbling up IP?

The announcement that Cadence is planning to buy Evatronix marks the company’s fourth acquisition in a matter of months. One slipped under the radar, what Martin Lund of Cadence referred to as “a small team in Canada working on high-speed SerDes.” The purchase of Cosmic Software is waiting for Indian regulatory approval, and the Tensilica acquisition was completed a few days ago.

A few years ago, Cadence buying companies was not news – it was business as normal. Today, is it a return to the old company working practices?  Well – no. The companies that Cadence was buying then were normally small(ish) suppliers of point tools. Today’s targets are IP companies, and join an IP pool established when Cadence bought Denali three years ago.

Synopsys already declares that about a third of its income comes from supplying IP. (Cadence wouldn’t be drawn on its IP sales, either current or projected.) And this ties in with the changing role of the EDA company and its position in the electronics food chain.  It is no longer sufficient for a chip company to provide silicon: with large and complex SoCs the customers want the software stacks for the interfaces, drivers for the OS (and even the OS).  This means that the chip companies need access to good quality IP to create the peripherals and additional material, and the EDA companies intend, as far as possible, to be the place that the designers turn to for this. Which explains Cadence’s acquisition.

What is interesting as well, is that with these companies that presumably have different development processes and design flows are expected to be integrated into an approach that Cadence is calling the “IP factory”, which will supply straight off-the-shelf IP and also create, within certain limits, customised IP for a specific chip builder’s application.

In the past, an EDA start-up would have acquisition as the exit route which would allow investors to get their returns. Today, perhaps, the road is to build IP?

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