Pradip K Dutta says Synopsys will have a complete suite of solutions to offer after this merger

With the recent acquisition of Avant!, Synopsys will now have depth in its design offerings rather than being just a point solution vendor. The deal will also allow Synopsys to venture into the analog and mixed signal space for the first time. Akhtar Pasha reports that the company will first have to tackle several technical and legal issues, before it gets to reap the benefits

The merger will certainly benefit Synopsys’ and Avant!’s customers but they have to deal with a lot of issues like overlapping products that may derail some products and plans in the future

The recent acquisition of Avant! by Synopsys has evoked a mixed reaction in the market place. This deal is expected to add expertise in back-end IC design, otherwise called ‘physical design,’ to Synopsys’ existing strengths in front-end design. The transaction is a good strategic move for Synopsys. “It is a win-win situation for Synopsys-Avant! and our customers because Synopsys will have a complete suite of solutions to offer after this merger. At the same time, it will let us retain Avant!’s customers,” says Dr Pradip K Dutta, managing director, Synopsys India.

The merger will help Synopsys compete head-to-head with Cadence in all areas but before that Synopsys has to resolve certain issues in order to benefit from the merger.

Himanshu Singh, acting country manager, Cadence Design Systems India, says, “The merger of Synopsys and Avant! is a reflection of what Cadence has been doing providing end-to-end products and solutions that address customer needs. The merger will certainly benefit Synopsys’ and Avant!’s customers but they have to deal with a lot of issues like overlapping products that may derail some products and plans in the future.”

Overlapping products
Both Synopsys and Avant! have tools that overlap. Synopsys has its route compiler and design floor plan compiling tools, while Avant! has Astro and floor compiling tools. The merger will force Synopsys to put its route compiler on the back burner. Dutta agrees that there is an overlap. He says, “The overlap is minimum and it will not affect us. Mergers of this nature take a little time to settle down. However, our new roadmap will be rolled out next month.”

Secondly, Synopsys will face problems in integrating its Physical Compiler with Avant!’s Astro back-end that has the Milkyway database. Milkyway database will create problems as the Avant! has not met the OpenAccess criteria (an open standard design data model based on Cadence’s Genesis database) for code based on open standards yet. This will lead to interoperability issues.

Third, on the competition front the merger does not excite Cadence. Singh says, “The merger may not bring changes that will force Cadence to change its strategy, nor does it bring any new technology to the table. So for us, the merger will not have any effect on our business until the post-merger issues are sorted out.” On the contrary, Cadence has planned new products that will address the changes in the chip industry, especially the growth in analog and mixed signal chips and the need for faster prototyping. “It has already launched a new product called Silicon Virtual Prototype (SVP) a new tool to design .18, .13 and 90 nanometer chips.” Many fear that the merger may delay Synopsys’s new product initiatives by six months.

R&D capabilities in India
“The combination of Synopsys and Avant! creates a new opportunity in verification,” says Dutta. He adds that the merger will help us to venture into the analog and mixed-signal verification tools.” Currently Synopsys has expertise only in digital designs.

The acquisition is expected to boost Synopsys development team in India greatly. Avant! has a team of 115 engineers at its development centre in Hyderabad, which is now merged with the Synopsys India Engineering team in Bangalore that has 105 engineers. Dutta adds, “The Synopsys India Engineering team at Hyderabad will be focusing on verification technology and nanometer analysis and tests whereas the Bangalore team will be responsible for core software development in verification, IC implementation along with professional services in wireless and broadband.” Synopsys plans to invest $5 million in the coming years into its R&D centre.

But even the combined R&D strength of Synopsys-Avant! is still less than Cadence’s current base of 350 engineers at Cadence’s Gurgaon centre. Cadence is building another facility (which will be completed by February 2003) to house 700 engineers. Meanwhile, Cadence has decided to rename its R&D centre as ‘Cadence Corporation Resource Centre’ and it plans is to add another 350 engineers by 2006. The company has plans and invest $50 million in over the next five years. In the past, Cadence and Synopsys have invested about $100 million and $25 million, respectively, in setting up their R&D centres in India.

In addition to these issues, Cadence is seeking more than $1 billion damages in a law suit against Synopsys. Should it win in court, Synopsys-Avant! will suffer a serious setback. While Synopsys will be busy fixing these issues in the next couple of months, Cadence may try to bite into Synopsys’ market share.