EDA Consolidation Continues

By _One Million by One Million Blog

July 1, 2010

The EDA Consortium recently announced a second consecutive quarter of sequential revenue growth for overall electronic design automation (EDA) revenues. For Q4 2009, EDA industry revenues of $1.26 billion grew 8.1% over the quarter while declining 4.2% over the year. The consortium noted that the biggest upticks came in the categories of CAE, IC Physical Design, and semiconductor intellectual property (IP).

No wonder, then, that Synopsys (NASDAQ:SNPS) is continuing with its acquisition spree. The company recently acquired the intellectual property provider Virage Logic Corporation for nearly $315 million. Synopsys believes that high-quality IP will remain key for “enabling designers to reduce integration risk and speed time-to-market.” It is hopeful that the Virage acquisition will broaden its portfolio and help it to address the market in providing a quick way to incorporate standard functions into their systems-on-chips (SOCs). Last fiscal year, Virage reported revenues of $47.4 million. I agree with Daniel Nenni that the acquisition will give Synopsys a near monopoly in the design enablement space and make it a bigger threat to competitors such as Cadence and Mentor, although not so much to ARM.

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