Synopsys tight-lipped about MoSys lawsuit

Mike Santarini
(04/29/2004 8:00 AM EDT)

  SAN JOSE, Calif. — Faced with a breach-of-contract suit from spurned partner Monolithic System Technology Inc., Synopsys Chairman and CEO Aart de Geus is revealing little about why Synopsys terminated its controversial merger with MoSys.

"We had an agreement [with MoSys]. In the agreement were a set of conditions, and those were not all met," de Geus in an interview. "Out of that we exercised our right to terminate on time and paid the termination fee in full. It was that simple."

Before calling off the merger, de Geus went to great lengths to justify the $350 million acquisition of MoSys, a company that was expected to report revenues in the neighborhood of $23 million this year. At the time, de Geus told EE Times and the E-Mail Synopsys Users Group that MoSys possessed strong technology that would thrive under Synopsys' larger sales channel.

de Geus declined to say whether his views on MoSys' technology have changed, but he said the Synopsys IP strategy is to provide IP that users could create themselves but "where there is no economical or technical reason to do so."

"Our IP strategy is doing very well," said de Geus. "In that context we do believe memories will be important to customers and nothing from that perspective has changed."

The Synopsys chief also declined to discuss whether it will pursue another memory vendor such as UniRAM. "We don't comment on future acquisitions," said de Geus.

Last week, while de Geus was on vacation, a spokeswoman for Synopsys said UniRAM's lawsuit against MoSys was one but not the only reason Synopsys terminated its acquisition of MoSys.

UniRAM sued MoSys in March, claiming UniRAM provided trade- secret information to Taiwan Semiconductor Manufacturing Co. Ltd. between 1996 and 1997. It also alleged that MoSys improperly obtained unspecified trade secrets in an unknown manner. MoSys has denied the allegations, and the case is still pending.

In announcing its suit against Synopsys last week, MoSys alleged Synopsys didn't explain why it was terminating the merger.

de Geus declined to comment about whether he or anyone at Synopsys has provided MoSys with an explanation of the termination agreement.

Financial analysts explained that the lawsuit was expected because MoSys would likely have been sued by its own shareholders had it not filed for breach of contract against Synopsys.

MoSys is seeking to either compel Synopsys to complete the merger or pay MoSys more than the $10 million Synopsys has already paid to end the acquisition.

de Geus indicated that Synopsys has no plans to complete the merger. "We have executed the right to termination and we have paid the termination fee," he said.