Mentor Graphics Named Leading IP Services Provider and Commodity IP Vendor In Inaugural Dataquest IP Market Study

WILSONVILLE, Ore., June 20 -- Mentor Graphics Corporation (Nasdaq: MENT) today announced that it is the leading Intellectual Property (IP) services provider and commodity IP vendor according to a recent study by Gartner Group/Dataquest.

``Worldwide Semiconductor Intellectual Property Market Share Rankings, 1999,'' is the first study by Dataquest of the emerging semiconductor IP market. Mentor Graphics® captured number one rankings in IP services (32.9-percent market share) and several commodity IP categories, including ethernet (29.1-percent), communications (9.0-percent), Universal Serial Bus (12-percent) and automotive (18.2-percent).

``The reality of the System-on-Chip era has forced our customers to reorganize their internal infrastructure and processes for design reuse and third-party IP integration,'' said Walden C. Rhines, president and chief executive officer, Mentor Graphics Corporation. ``Our success in the overall IP market is driven by our unique ability to provide multi-national companies with both a proven core library and the necessary expertise and experience required to create a standard infrastructure and method for design reuse.''

Worldwide Leadership in Design Services

Growth for Mentor Graphics in the design services segment was fueled by key initiatives in the areas of design reuse methodology consulting, IP infrastructure development and IP re-engineering. Spurred by a rapid increase in System-on-Chip (SoC) based design starts, narrow market windows, product differentiation requirements and design cost pressures, the design services market is one of the fastest growing segments in the young semiconductor IP market.

Mentor Graphics offers consulting services to assist the development and implementation of design flows that maximize the reusability and integration of in-house or productized-IP. Services include reuse methodology assessment and optimization, standards development and reuse adoption programs. To assist semiconductor designers in creating an efficient infrastructure for IP integration, Mentor's consulting division developed its QuickUse(TM) Development System (QDS). QDS allows companies to deploy a web-based design reuse solution that employs a powerful relational database, proprietary socketization algorithms, design automation and other methodologies to ease integration and verification of chip designs.

Mentor Graphics has also seized a significant market opportunity to help companies create reusable IP. Leading companies in segments such as telecommunications and networking have partnered with Mentor Graphics to re-engineer pre-existing IP into reusable formats. Mentor consultants work with IP creators to educate design teams so future IP development is done with reuse in mind and with an eye to leveraging current design efforts toward future profitability.

``In 1999, several global corporations adopted our design reuse methodology services to increase productivity and standardize processes in their SoC design flows,'' said Phil Bishop, vice president and general manager, Mentor Graphics Consulting Division. ``Moving forward, we anticipate continued growth in the area of infrastructure and methodology for SoC design with key initiatives in the areas of platform-based design and STAR IP integration.''

Broadest Independent Source of Commodity IP

In addition to strong growth in the IP services segment, Mentor Graphics solidified its position as the leading independent supplier of commodity RTL soft IP cores. Increased demand for Ethernet, 8051, USB and PCI cores were key to Mentor's commodity IP revenues in 1999. These RTL soft cores are essential components in communications design, the fastest growing IP segment (46 percent growth), according to the Dataquest results.

With an established track record of success in commodity IP core development and delivery, the Inventra(TM) Intellectual Property division is poised to assert leadership in the exploding IP for programmable device market. Customers such as Actel Corp. and Cypress Semiconductor have partnered with Mentor Graphics in a program that provides web-based access to optimized netlists of a selection of Inventra IP cores. The program provides unprecedented access to desired IP for licensing and evaluation.

``Our success in 1999 can be attributed to increased demand for pre-verified bus interfaces, processors, microcontrollers and Ethernet cores in high growth market segments such as consumer digital, computing, networking and communication applications,'' said Mick O'Brien, general manager of the Inventra Intellectual Property Division of Mentor Graphics. ``Two major components of Inventra's strategy for 2000 are to continue penetration into the growing FPGA market and to continue to pioneer IP reuse standards like OpenMORE. We recognize a significant market opportunity to provide optimized netlists for leading edge devices, over the web, where system designers can quickly access a pre-verified IP core for rapid evaluation and integration into a time sensitive design.''

About Mentor Graphics

Mentor Graphics Corporation is a world leader in electronic hardware and software design solutions, providing products and consulting services for the world's largest electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of more than $500 million and employs approximately 2,600 people worldwide. Company headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site: www.mentor.com.

NOTE: Mentor Graphics is a registered trademark and QuickUse and Inventra are trademarks of Mentor Graphics Corporation. All other company or product names are the registered trademarks or trademarks of their respective owners.

Contact: Leanne White of Mentor Graphics Corporation, 503-685-1984, or leanne_white@mentor.com; or Jeremiah Glodoveza of Benjamin Group/BSMG Worldwide, 408-559-6090, or jeremiah@benjamingroup.com, for Mentor Graphics Corporation.