EDA WEEKLY readers may also be familiar with the Electronics IP Industry Commentaries published quarterly by Henke Associates on Indeed, the most recent IP Commentary was just posted on June 4, 2010:

Among the current IP Group of Six (the IP G6) covered each quarter in the Electronics IP Industry Commentaries is IP vendor Virage Logic Corporation.

Well, it looks like the IP G6 will soon become the Group of Five … the IP G5. As described in the following News Highlight, EDA “Big 3” member Synopsys will soon acquire Virage Logic, just as Big 3 member Mentor Graphics acquired IP vendor LogicVision last summer, making the G7 into the G6 at the time. The third member of the Big 3, Cadence is also active in the IP realm, announcing in May 2010 that it had entered into a definitive merger agreement with Denali Software, Inc. in which Cadence will acquire Denali for $315 million in cash (see June 4 Electronics IP Industry Commentary mentioned above). The $315 million figure seems popular, as we will see below. Just a coincidence.

On June 10, 2010 Synopsys, Inc. and Virage Logic Corporation announced that they have signed a definitive agreement for Synopsys to acquire Virage Logic. Synopsys said that Virage Logic's offerings will complement Synopsys' DesignWare® interface and analog IP portfolio by adding embedded memories with test and repair, non-volatile memories (NVMs), standard cell libraries, and programmable cores for control and multimedia sub-systems. With this acquisition, Synopsys will add to its ability to help design teams achieve their system-on-chip (SoC) development goals by providing them with a more comprehensive portfolio of production-proven, high-quality IP and worldwide technical support.

Assuming consummation of the terms of the agreement, Synopsys will pay $12.00 cash per Virage Logic share, resulting in a transaction value of approximately $315 million, or approximately $289 million net of cash acquired. The transaction is still subject to regulatory and Virage Logic shareholder approval, as well as other customary closing conditions.

The boards of directors of both companies have already approved the transaction, under which current Virage Logic President and CEO Alex Shubat will join Synopsys. After the closing, Virage Logic will become part of Synopsys, and Virage Logic stock will cease trading. The transaction is expected to close in the fourth quarter of Synopsys' fiscal 2010 (i.e. between November 1, 2010 and January 31, 2011).Therefore, Synopsys anticipates the transaction will be neutral to its non-GAAP earnings per share in fiscal 2010, and accretive in fiscal 2011 (i.e. beyond January 31, 2011).

"With more functionality being integrated into a single device, high-quality IP continues to be key for enabling designers to reduce integration risk and speed time-to-market," said Dr. Aart de Geus, chairman and CEO at Synopsys. "Bringing Synopsys and Virage Logic together broadens our portfolio and builds on two very strong technical teams. It is also in line with what so many customers are looking to Synopsys to address: a way to quickly incorporate standard functions into their SoCs so they can focus on developing differentiated products."

"When I co-founded Virage Logic in 1996, it was with the belief that a semiconductor IP company could provide the technically superior building blocks that the industry needed to accelerate development of high quality, cost-effective end products," said Dr. Alex Shubat, president and CEO of Virage Logic. "Today, the transition to a fabless, or 'fab-lite' model, coupled with the explosion in SoC product development costs at the advanced process nodes, has resulted in an escalating need by the semiconductor manufacturers for production-proven IP. By joining forces with Synopsys' impressive engineering team and by gaining access to their global channel, we will be able to accelerate the development and delivery of our broad product offering to help customers meet their design-for-profitability goals. I am excited to join Synopsys to further my original vision."

On June 7, 2010 Federal Reserve Chairman Ben Bernanke said, “I am hopeful (that) the (US) economy will gain traction and not fall back into a 'double dip' recession. My best guess is we will have a continued recovery, but it won't feel terrific." Addressing the Woodrow Wilson International Center for Scholars, Bernanke also said that "economic growth won't be robust enough to quickly drive down the unemployment rate, now at 9.7%. The central bank would probably have to start raising interest rates before the economy returns to full employment or if inflation surges.”

Also on June 7 the Federal Reserve Bank of Chicago said attendees at its Automotive Outlook Symposium are predicting growth rates of 3.1% this year and next for the US economy. Most of the major components of real GDP -- particularly consumer spending and business fixed investment --are expected to contribute to the improved forecast.

On May 27, 2010, the EE Times reported that the global chip market is expected "to see a rise in annual growth in the next decade, to about 8% to 10% on average, due to the demands of environmental engineering on semiconductor technologies," according to Matthew Towers, CEO of Intex Management Services Ltd. "These demands will be additive to those of the information and communications technology sectors, which semiconductors are already meeting and which were responsible for growth of 6% to 7% annual growth in the first decade of the 21st century." However, the "sector will continue to suffer from the 'bullwhip amplification' effect," and "the result is that a change in global GDP tends to produce a tenfold effect in the chip market and an even larger effect in the market for semiconductor manufacturing equipment,” Towers said.

In its latest report on June 1, 2010 The Semiconductor Industry Association (SIA) said that worldwide semiconductor sales in April 2010 were $23.6 billion, an increase of 2.2% from March when sales were $23.1 billion. Sales in April 2010 increased by 50.4% from April 2009 when sales were a meager $15.7 billion. Sales for the first four months of 2010 were $92.6 billion compared to $60.1 billion for the like period of 2009, an increase of 54.2%. All monthly sales numbers represent a three-month moving average. “Global sales of semiconductors grew at a healthy rate in April 2010, surpassing the previous monthly record level of November 2007,” said SIA President George Scalise. “As expected, both the year-on-year and sequential growth rates moderated slightly. The unusually high year-on-year comparison is a reflection of the trough of the recession in early 2009 compared to strong demand today. Important contributors to current growth of semiconductor sales include the worldwide adoption of 3G wireless communications and consequent investment in infrastructure and recovery of demand from the enterprise, automotive, and industrial sectors. Going forward, we expect semiconductor sales will return to historical seasonal patterns. Future growth of the industry remains heavily dependent on the continued global economic recovery, and in particular, on continued growth in the developing markets that are the largest demand drivers for our products,” Scalise concluded.

While HP recently said it would soon lay off some 9000 workers, it was also announced that HP will develop ways for smartphone users to print documents without utilizing a computer.

The recent unveiling of Apple's Newest iPhone has caused widesoread coverage in major news sources. Analysts noted that while the new device does not include many surprise features, its launch should help Apple reestablish itself in the smartphone market. The new version is said to be faster and thinner than previous models, with a crisper display and a more angular look. It includes a 5-megapixel camera that can shoot and edit high-definition video.

According to analysts, the new phone came at an opportune moment for Apple, as buyers have been faced with an increasingly large array of attractive smartphones.

The latest report from the EDA Consortium (EDAC) Market Statistics Service (MSS) was released on April 01, 2010. (The next EDAC Report covering Q1 2010 will not be available till after July 1, 2010) . In its April 01, 2010 report, EDAC announced that the total Electronic Design Automation (EDA) industry revenue for Q4 2009 was $1262.7 million, an 8.1% sequential increase from Q3 2009 . However, on a year-over-year basis, the total Q4 2009 EDA industry revenue of $1262.7 million represented a 4.2% decline, compared to $1318.7 million in Q4 2008. “Despite the year-to-year decrease, the EDAC revenue numbers (for Q4 2009) continue to show a sequential increase over the previous quarter,” said Dr. Wally Rhines, EDAC chair and chairman and CEO of Mentor Graphics.

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