Electronics IP Industry - An August 2008 Update
by Dr. Russ Henke and Dr. Jack Horgan
In their September 2003, December 2003, February 2004, May 2004, August 2004, November 2004, February 2005, May 2005, August 2005, November 2005, February 2006, May 2006, August 2006, November 2006, February 2007, May 2007, August 2007, November 2007, February 2008 and May 2008, Electronics IP Industry Commentaries, the authors examined the recent financial histories and future outlooks of the remarkable phenomenon of Electronics Intellectual Property (IP) providers, a niche that has emerged in its own right to claim a substantial amount of revenue in the world of Electronics Design Automation.
We had arbitrarily selected eight (8) publicly-traded companies originally (then called the “Group-of-8” or “G8”), as representative of the current financial state of the Electronics IP industry. At the end of 2004, ARM completed its acquisition of Artisan Components, Inc., thereby reducing our “G8” to “G7”. Accordingly, in this August 2008 Commentary, we look at the financial performances of the “G7” Electronics IP vendors during the second quarter of 2008. We also mention the recent interchanges between Cadence and Mentor Graphics since May 2008 in News Highlights.
ARM Holdings plc
MIPS Technologies, Inc.
Virage Logic Corporation
San Jose, CA
San Jose, CA
Mountain View, CA
Los Altos, CA
For the “G7” companies above, we assume that all of their revenues are Electronics IP sales and directly related IP services.
Recent EDA Industry News Highlights
CADENCE vs. MENTOR GRAPHICS:
These two members of the 'Big 3' EDA software vendors oligopoly have been making M&A headlines on a frequent basis since just after the last Electronics IP Industry Commentary and EDA Commentary were published three months ago.
Mergers & Acquisitions (M&A) are hardly rare in the world of Computer Aided Engineering (CAE) or Computer Aided Design (CAD). Indeed, seldom does a quarter pass without one Electronic Design Automation (EDA) vendor buying another. (The same is true in the Mechanical CAE and Mechanical CAD/PLM industries).
Indeed, being acquired by one of the top three vendors in EDA (or in MCAD) is a favorite exit strategy for small start-ups that develop a specialized or breakthrough technology. This exit path is especially attractive as the IPO market for venture-backed companies dries up. It is often the way for the larger software vendors to make up for their own relative lack of internal R&D funding.
While EDA companies usually “stick to their own kind” and buy smaller EDA companies, and MCAD companies likewise, it's not unheard of for crossover to occur. For example, MCAE vendor ANSYS recently acquired EDA vendor ANSOFT.
More unusual, however, is for one of the leading EDA or MCAD vendor companies to try to acquire one of the other members of their respective oligopolies.
But just such a possibility surfaced in the news in mid-June 2008, wherein CADENCE (San Jose, CA) was reportedly pursuing MENTOR GRAPHICS (Wilsonville, OR). CADENCE, SYNOPSYS, and MENTOR are currently the Big 3 EDA vendors, in that order size-wise. Founded in 1981, MENTOR reported revenues in 2007 of about $850 million. CADENCE was founded in 1988 and sported revenues of more than $1,600 million in 2007. (Their respective current revenue levels are under heavy pressure in 2008).
Rumor had it in June 2008 that CADENCE approached MENTOR on a friendly basis some months earlier regarding an all-cash acquisition, but CADENCE was rebuffed. On June 17, 2008, CADENCE revealed to the public that its offer to MENTOR was for $16 per share, a 30% premium over MENTOR's closing price on June 16. Industry sources said that CADENCE, once rebuffed, then launched a hostile takeover bid for MENTOR.
In June, MENTOR issued a statement rejecting the CADENCE offer on two grounds - that it was too low and that the merger would have trouble passing federal antitrust review. "For these and other reasons, our board unanimously rejected the proposal," wrote MENTOR CEO Dr. Walden Rhines. (Dr. Rhines joined MENTOR in 1993 from TI).
For its part, CADENCE downplayed the possible antitrust issue. CADENCE also said the merger “would lower software costs and benefit electronics makers because CADENCE and MENTOR could 'share' sales and administrative staffs”. Further, CADENCE CEO Mike Fister argued that the software products of CADENCE and MENTOR are “complementary”. (Mr. Fister joined CADENCE in 2004 from Intel).
Should it eventually be consummated, it would be highly unusual if this merger, like many others, did not result in significant numbers of employee layoffs. Moreover, there are several product lines at both EDA vendors that are arguably directly competitive.
But hey, hostile takeover attempts are the signs of our times (think Microsoft-Yahoo, Staples-Corporate Express, Electronic Arts-Take Two, InBev-Anheuser Busch, …).
Indeed, it was reported in the Portland Business Journal on June 24, 2008, that MENTOR itself was then pursuing British company Flomerics Group PLC with an offer that Flomerics' board ironically said was too low. Flomerics is a vendor of Computational Fluid Dynamics (CFD) simulation software.
Well, it now looks like all the 'Big 3' EDA vendors will be around, at least for awhile.
On August 15, 2008, CADENCE finally grew tired of the effort to acquire MENTOR and called off its $16 per share ($1.6 billion) bid.
Shareholders immediately expressed their opinions of this news. Shares of CADENCE surged 7% during the August 15 trading session to close at $7.64 a share, while shares of MENTOR tanked, falling 26% to close at $10.33.
Industry insiders say that since mid-June, CADENCE had been having trouble obtaining reasonable funding terms for the more than $1.1 billion needed to do the MENTOR deal, a task made more troublesome after CADENCE lowered its 2008 year-end guidance in late July 2008. "Although we achieved our second-quarter numbers, it was more difficult than we planned,” CADENCE CEO Mike Fister said.
So the 'Big 3' EDA Vendors will remain the 'Big '3 for the time being.
However, the entire EDA Industry is under a lot of pressure these days, and some form of consolidation and/or restructuring will likely occur sooner rather than later.
Global Semiconductor Alliance:
On June 26, 2008 the Global Semiconductor Alliance (GSA) released the CYQ1 2008 version of its Global Semiconductor Financial Report. This quarterly report includes detailed trend analysis on financial data for fabless, IDM, pure-play foundry, intellectual property, electronic design automation, design service and back-end sectors.
Worldwide semiconductor revenue totaled $67.3 billion in CYQ1 2008, rising only 0.2% quarter-over-quarter, but 5% year-over-year.
Fabless revenue totaled $13.4 billion, which grew 16% year-over-year and equated to 20% of the semiconductor sales total.
The top 10 fabless companies (by first quarter revenue) combined for $7.8 billion, or 58% of total fabless revenue (see Table 1 below):
Semiconductor Industry Association
On August 4, 2008 the Semiconductor Industry Association (SIA) reported that global sales of semiconductors for the first half of 2008 grew to $127.5 billion, an increase of 5.4% over the first half of 2007 when sales were $121 billion. Sales in the second quarter were $64.7 billion, an increase of 3% over first quarter sales of $62.8 billion. Thus far, it appears that increased energy costs have had little impact on demand for electronic products that drive semiconductor usage. SIA President George Scalise said, “Key demand drivers for semiconductors - especially personal computers, which account for 40% of semiconductor sales, and mobile phones, which drive about 20% of demand - continued to show double-digit unit growth.” He added, “In 2008, developing countries - with sales of over 153 million units - will account for half of worldwide PC sales. In mobile phones developing countries are expected to account for 66% of total worldwide unit sales.”
The SIA's Global Sales Report (GSR) is a three-month moving average of “sales activity” tabulated by the World Semiconductor Trade Statistics (WSTS) organization, which represents approximately 66 companies. The moving average for the second quarter shown in Table 2 below has the Americas accounting for only 16% of “sales activity”, Europe very slightly behind, Japan accounting for over 18% and Asia Pacific accounting for over 50%:
How did the Electronics IP G7 perform in the Second Quarter of 2008?
On the IP revenue front, Table 3 below reveals that the G7's combined Q2 2008 performance was $224 million, a SMALL drop of 1.6% versus the revenue of $228 million in Q2 of 2007 and a larger decline of 3.4% from the $232 million in the just prior quarter. Virage Logic had the largest year-over-year percentage growth at 33.5%, followed by MIPS at 22% and Ceva at over 18%. MoSys had the largest year-over-year decline at more than 26%. Rambus was close by with a drop of almost 25%. On a sequential basis MoSys was the percentage leader and the only IP firm to report double-digit (13.4%) revenue growth. MIPS was second at 5.4% revenue growth. ARM endured a modest decline when measured in US dollars (-4.6%). Rambus had a sequential drop in revenue of just over 10%.
Figure 1 below provides a bar graph of each vendor's revenue for Q2 2007, Q1 2008, and Q2 2008 in sequence.
ARM continues to dominate the G7 with 57% relative market share. Rambus and MIPS come next with 16% and 13%, respectively. See Figure 2.
Relative to earnings, Table 4 reveals that the G7 IP Providers had a combined Q2 2008 net loss of -$231 million compared to combined net gains of $15.1 million in the second quarter of 2007, and of $1.3 million in the just prior quarter. The large combined Q2 2008 loss contained two significant write-downs of assets. MIPS wrote down over $100 million related to its acquisition of Chipidea in August 2007, and Rambus wrote down $130 million related to valuation of net tax deferred assets. ARM delivered consistent earnings over the three quarters presented in the table.
Q2 2008 Results of Individual Electronics IP Providers:
Total dollar license revenues in Q2 2008 fell by 28% to $42.8 million, representing 33% of group revenues, compared to $59.3 million in Q2 2007. License revenues were comprised of $30.2 million from PD and $12.6 million from PIPD.
Total dollar royalty revenues in Q2 2008 grew by 28% to $60.7 million, representing 47% of group revenues, compared to $47.4 million in Q2 2007. PD royalties grew by 27% to $51.0 million, compared to $40.1 million in Q2 2007. This Q2 increase was due to increased penetration of ARM technology-based chips across all applications, and continuing growth in the logic and microcontroller industry. Total Q2 PIPD royalties grew 33% year-on-year to a record $9.7 million, including $1.1 million of catch-up royalties. Underlying Q2 royalties, excluding catch-up royalties in both periods, were up by 28% year-on-year.
Sales of development systems in Q2 2008 grew 15% to $16.2 million, representing 13% of group revenues, compared to $14.2 million in Q1 2008 and $14.1 million in Q2 2007. The sequential increase was partly due to a large tools licensing deal, with a tier 1 semiconductor company adopting ARM tools across multiple sites.
As indicated in April 2008, there has been some restructuring of ARM's development systems' product lines which will give rise to a headcount reduction of about 50 within the System Design Division (SDD). As a result, a restructuring charge of £0.5 million has been incurred in Q2 2008. The reduction in headcount will be completed during Q3 2008.
Service revenues in Q2 2008 were $8.4 million, representing 7% of group revenues, compared to $8.4 million in Q2 2007.
The Processor Division (PD), formerly the original ARM, had total revenues of $81.2 million, a drop of 4.9% year-over-year and a drop of almost 11% sequentially. Eleven processor licenses were signed with semiconductor companies in Q2 for ARM7, ARM9, ARM11, Cortex and Mali technology. Q2 also included four significant licenses with major OEMs. Three more Cortex-M3 licenses were signed in the quarter for microcontroller applications.
Year-on-year, reported PD unit shipments grew strongly in Q2 2008. Reported processor unit shipments were 892 million, up 37% compared to Q2 2007.
The Physical IP division (PIPD), the Artisan division established after the acquisition at the end of 2004, had total revenue of $22.3 million, an increase of 4.7% year-over-year and an increase of 6.7% from the prior quarter. PIPD license revenue increased sequentially to $12.6 million in Q2 2008 from $11.8 million in Q1 2008. Sixteen physical IP licenses were signed in the quarter for products across the technology portfolio. PIPD royalties in Q2 2008 were a record $9.7 million, up 6% from $9.1 million in Q1 2008 and up 33% from $7.3 million in Q2 2007. Underlying royalties for PIPD were $8.6 million, up 28% year-on-year. Sequentially, underlying royalties were up 3% despite an estimated 2% decline in overall foundry shipments.
Tudor Brown has become President of ARM and Mike Inglis has become EVP and General Manager of the Processor Division. Both continue as members of the ARM Holdings Board.
In the quarter licensing revenue accounted for 33% of total revenue, royalties for 47%, development systems for nearly 13% and services for 6.6%.
Net income for the quarter was $28.1 million, an almost 7% rise from the $26.3 million in the year ago quarter, and an increase of 60% from the $17.7 million in the just previous quarter.
Warren East, ARM Chief Executive Officer, said, “ARM has made good progress in the first half of 2008 in challenging market conditions, further extending the Group's backlog which was already at record levels. We see continued strong demand for ARM's technology including long-term commitments for our processor and physical IP technology by industry leaders.
Prospects for PD licensing in H2 2008 are promising notwithstanding the uncertain current trading environment. We have a broad product portfolio that our customers are designing into applications from mobile computers to microcontrollers. We are encouraged by our second successive quarter of sequential growth in PIPD as we build momentum in that business.
Growth of more than 25% year-on-year in underlying royalty revenues for both PD and PIPD provides further evidence of the increasing use of ARM's technology in a rapidly broadening range of consumer electronics products.”
On July 23, 2008 CEVA, Inc. reported financial results for the second quarter, the period ended June 30, 2008. Total revenue for the quarter was $10.1 million, an increase of 18% compared to $8.5 million reported for the second quarter of 2007, and essentially flat compared to the prior quarter, reflecting seasonal weakness. The $10.1 million was above the midrange of the forecast given last quarter.
Q2 licensing revenue was $6.0 million, accounting for 60% of total revenue, an increase of 9% year-over-year from $5.5 million, and an increase of almost 19% from the $5.1 million in the just previous quarter. Royalty revenue was $3.0 million, 30% of total revenue, a year-over-year increase of 58% but a drop of 18% sequentially. Revenue from services was $1.0 million, 10% of total revenue, a drop of 4% year-over-year and a decline of 18% sequentially.
During the quarter CEVA concluded eight new license agreements. Seven agreements were for CEVA DSP cores, platforms and software, and one agreement was for CEVA Bluetooth technology. Seven of these were in Asia and one in Europe. CEVA also concluded two strategic licensing agreements with tier 1 OEMs for its DSP cores and platforms. CEVA is reportedly the leading DSP IP provider with 61% marketshare, up 10% year-over-year. CEVA has 180 employees.
CEVA licensees shipped 70 million units in the 2nd quarter. This was a 54% growth from the same period a year ago, but down 18% from the record highs in the last two quarters. Of the 70 million units, 48 million were from licensees paying per unit royalty. CEVA has 27 licensees, of which 20 are paying per unit royalties versus drawing down from prepaid royalties.
Net income for the quarter was $0.7 million, a 61% increase compared to $0.4 million for the second quarter of 2007, but a drop of 88% versus $5.5 million in the just preceding quarter.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "During the second quarter of 2008, CEVA continued to expand its licensing activities and customer base in the handset market with strategic agreements in LTE and 3G data cards. We continue to see the introduction and adoption of new handsets enabled by our technologies which we believe will further contribute to our growth. We also are encouraged by the growing adoption of our technologies beyond cellular to wireless and consumer electronics applications."
Yaniv Arieli, Chief Financial Officer of CEVA, stated, "During the first half of 2008, CEVA achieved strong financial performance as compared to prior years. CEVA achieved an increase of 24% in revenue for the first six months of 2008 as compared to the same period in 2007, as well as a significant increase of 1400% in fully diluted EPS when comparing the same periods. The results for the first half of 2008 include a capital gain of $7.7 million, net of taxes, associated with CEVA's divestment of its equity interest in GloNov Inc. and a restructuring expense of $3.5 million associated with the termination of the Harcourt lease.”
Net loss for the quarter was $1 million, compared to net losses of $1.1 million and $1.3 million in the year ago quarter and in the prior quarter, respectively.
James T. Healy, president and CEO of LogicVision, said, “The second quarter of 2008 was another good quarter. Our revenues, net loss and cash position were in line with the guidance we gave in April, and our bookings were $7.1 million. The new orders came from 15 customers and included a sizeable renewal from an existing major customer as well as a first-time order from a new customer that could potentially grow into a bigger account. This quarter's bookings combined with $10.5 million of new orders in the first quarter gives us a total of $17.6 million of new orders in the first half of 2008 -- making it the highest six-month booking period in the company's history.”
Royalty revenue of $10.8 million in Fiscal Q4, accounting for 32% of total revenue, was a drop of 4.4% year-over-year, and a drop of 14.3% sequentially. The reduction in royalty revenue was driven by a combination of lower volumes and the impact of reduced per-unit royalties attributable to certain customers reaching specified volume levels.
Fiscal Q4 contract and license revenue was $18.1 million, an increase of 22% from the $14.8 million reported in the prior quarter, and a hefty increase of 46% from the $12.4 million reported in the fourth quarter a year ago. This Fiscal fourth quarter contract and license revenue increase was due to strong Processor Business Group licensing results ($10.1 million) partially offset by lower Analog Business Group license results ($7.9 million).
Net loss for the fourth Fiscal quarter was a giant $108 million, compared to a net gain of $2.3million in the year ago quarter, and compared to a net loss of $4.3 million in the prior quarter.
Why was the Q4 loss so large? In connection with the completion of accounts for the fiscal year, the company evaluated the intangible and goodwill assets recorded for the Chipidea acquisition (August 27, 2007) and concluded that a significant reduction in value was required, given the softening overall market for IP and delays experienced in realizing expected synergies. MIPS Technologies also concluded that several other impairments should be recorded with respect to other acquisitions and investments. Accordingly, Fiscal Q4 operating expenses of $126.1 million included a $103.1 million impairment of goodwill and intangible assets, of which $101.4 million was associated with the Analog Business Group (Chipidea).
For the entirety of Fiscal 2008, MIPS reported revenue of $97.8 million, up 17.4% from the $83.3 million in the preceding year. Royalty revenue was $46.4 million, or 47% of total revenue. This was an increase of 4.4% from fiscal 2007. License and contract revenue was $51.4 million, up 32.2% from the previous year. Net loss for the year was $131 million, compared to a net gain of $8.4 million in the prior year.
MIPS Technologies also announced a broad restructuring of its business to better integrate its Analog Business Group and reduce its overall cost structure to enhance profitability and cash flow. During Fiscal Q1 and Q2 2009, the Company expects to incur a new restructuring charge of approximately $4.0 - $5.5 million. These costs include the effects of reductions in employees and facilities-related costs.
John Bourgoin, MIPS president and CEO, said, “Our fourth quarter results reflect both progress and continuing challenges. We had a good revenue quarter, reaching the upper end of our guidance and recording the highest quarterly revenues in the history of our company. But we believe the market continues to show signs of softness, and so we have taken decisive restructuring actions to resize the company in both of our business groups to enable the sustainable profitability and cash flows that investors expect from our combined IP businesses. These restructuring actions, along with the restructuring of our debt facility accomplished in the fourth quarter, will, when completed, reduce our quarterly spending by approximately $5 million. The write-down reflects current market realities, but our belief in the long term growth and strategic value of the Chipidea analog business remains strong."
Net loss for the quarter was $4.5 million, compared to net losses of $43,000 in the year ago quarter and $4.3 million in the first quarter of the year.
Len Perham, MoSys' President and Chief Executive Officer, stated, “During the second quarter, we recorded sequential growth in both licensing and royalties, which resulted in a sequential increase in total revenue. We secured two additional license agreements with new customers for our DDI technology, which enables mobile handset manufacturers to cost effectively meet the design challenges of today's advanced handsets requiring both high resolution displays and multimedia functionality. Additionally, LG Electronics, a licensee of our DDI technology, began production shipments late in the first quarter."
Royalty revenue was $32 million, accounting for 90% of total revenue. This was down 17.6% year-over-year, and down 2.4% sequentially. Contract revenue was $3.4 million or 10% of total revenue. This was down 59% year-over-year and down 48% sequentially.
Net loss booked for the second quarter was $145 million, compared to net losses of $2.7 million in the year ago quarter and $12.6 million in the previous quarter. Total costs and expenses for the quarter were $52.6 million, which included $9.0 million of stock-based compensation expenses and $2.3 million for the previous stock-based compensation restatement and related legal expenses. This is compared to total costs and expenses of $63.0 million for the first quarter of 2008, which included $10.5 million of stock-based compensation expenses and $0.9 million of restatement and related legal expenses.
General litigation expenses for the second quarter of 2008 were $9.1 million, a decrease of $4.1 million from the first quarter of 2008. As compared to the second quarter of last year, total costs and expenses decreased from $57.7 million, which included $10.3 million of stock-based compensation expenses and $7.5 million of restatement and related legal expenses. General litigation expenses in the second quarter of 2008 increased $2.4 million from the second quarter of 2007.
During the second quarter of 2008, Rambus recorded a valuation allowance of $130.5 million against its net deferred tax assets to fully reserve previously recorded tax benefits generated from its pre-tax losses in the U.S. Pursuant to the Statement of Financial Accounting Standard 109: Accounting for Income Taxes, the Company determined this valuation allowance is required due to significant negative evidence, such as cumulative losses in recent years and projected losses from operations. Projected income from settlements or litigation was not included in the determination for the valuation allowance. The valuation allowance will be maintained until sufficient positive evidence exists to support its reversal.
Harold Hughes, president and chief executive officer at Rambus, said, “Despite the obvious headwinds faced in the quarter, we remain committed to a strategy that focuses on long-term success. We will continue to invest in technology development and fully fund our legal efforts. Nevertheless, we intend to reduce our current cost structure through actions which may include downsizing our workforce in order to maintain the financial strength of the company. In doing so, we will continue to support our customers and ensure we follow through on the commitments made to them."
Subsequently, on August 14, 2008, Rambus did announce a restructuring of the company. As a result of this action, Rambus will reduce its workforce by approximately 90 positions and will take a restructuring charge, on a cash basis, of approximately $4.0 million in the next two quarters, primarily related to severance expenses. With this restructuring and related cost saving measures, Rambus expects cash savings of approximately $17 million annually, principally due to reduced compensation related expenses.
Net loss for the quarter was $1.1 million, compared to a net loss of $1.2 million in the year ago quarter, and compared to a net income of $632,000 in the previous quarter.
Dan McCranie, chairman and CEO for Virage Logic, said, "License revenue increased 50% year-over-year while total revenue, which includes royalties, increased 34% year-over-year. We have been able to deliver four consecutive quarters of non-GAAP profitability and this financial performance underscores the significant progress we have made to date in transforming the company”
Stock Market Prices of the G7 Electronics IP Providers
As shown in Tables 6 and 7 and Figure 3 below, the combined stock prices for the G7 decreased 21% year-over-year in absolute terms and decreased 5.4% sequentially. The average percentage change was down over 27% year-over-year and down 1.7% sequentially. This compares to a drop of 14% in the major stock indexes year-over-year and a drop of 3.4% from the previous quarter.
On a year-over-year basis only Rambus' stock price rose (+6.1%). MIPS, ARM, LogicVision and MoSys had drops of over 40%, with MIPS suffering the largest decline at -57%. Virage Logic and CEVA had modest declines.
On a sequential basis Virage Logic was the percentage growth leader at +24% followed by MoSys at over +12% stock price growth. LogicVision had the largest decline at -26%, followed by Rambus at -18%.
Forecast Guidance from Individual IP Providers
Six of the G7 gave guidance for the next quarter. The combined forecast calls for 3.2% revenue growth year-over-year, and nearly 2% sequentially. Rambus was the only firm to forecast a decline relative to the same quarter last year. MIPS is the most bullish with a forecast of almost 26% revenue growth, with Virage Logic and Ceva projecting growth at around 15%.
Individual Company by Company Guidance
For guidance ARM said “We enter the second half of 2008 with a broad product portfolio for licensing into an increasingly diverse customer base; an opportunity pipeline expected to deliver near-term license revenue and good royalty momentum across the business. We therefore reiterate the guidance for FY 2008 given in both February and April; assuming no further deterioration in the trading environment, we continue to expect to increase dollar revenues in FY 2008 by at least the growth rate achieved in FY 2007.
As in prior years, Q4 revenues are expected to be stronger than Q3 revenues based on normal seasonal impacts on development systems revenues in the third quarter and the typical strength of license and royalty revenues in the fourth quarter.”
As guidance CEVA expects third quarter revenue to be in the range of $9.5 million to $10.5 million, compared to $10.1 million in the quarter just reported, and compared to $8.7 million in the third quarter of last year. For the year CEVA expects revenue in the range $39 million to $41 million, and net income of $2.5 million. This is unchanged from prior forecasts.
As guidance LogicVision anticipates revenue in the next quarter to be in the range of $3.0 million to $3.2 million, compared to $3 million in the quarter just reported, and compared to $3.0 million in the third quarter of 2007. Net loss is expected to be in the range of $600,000 to $800,000.
As guidance MIPS expects revenue in the next quarter to be in the range of $27 million to $29 million, compared to $28.9 million in the quarter just reported, and compared to $22.3 million in the same quarter last year.
MoSys did not provide guidance.
As guidance Rambus anticipates revenue in the next quarter to be in the range of $27 million to $31 million, compared to $35.7 million in the quarter just reported, and compared to $41.7 million in the third quarter of 2007.
As guidance Virage Logic expects revenue in the next quarter to be in the range of $15 million to $15.5 million. This compares to $15 million in the quarter just reported, and compares to $13.1 million in the same quarter a year ago.
EDA Consortium's Market Statistics
In the first quarter of 2008, the CAE segment accounted for 40% of total EDA revenue, IC Design & Verification for 24%, Semiconductor IP for 20%, PCB/MCM for 10% and Services for 6.5%.
For the first quarter of 2008 North America accounted for 42% of total EDA revenue, Europe for 20%, Japan for 24% and ROW for 14%.
Dr. Walden C. Rhines, EDAC chair and Mentor Graphics CEO and chairman, said “Weakness in the large EDA companies was partly offset by strength in startups, with resulting numbers that were slightly down year over year. Main areas of strength were in leading-edge technologies such as electronic system level design, design for manufacturing, design for test, IC layout verification, IC/ASIC power analysis, and RF/ mixed-signal design.”
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About the Authors of this Electronics IP Commentary:
Since 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. The number of client companies for Henke Associates now numbers more than forty. During his corporate career, Henke operated sequentially on "both sides" of MCAE/MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger Applicon, Gould Electronics, ATP, and Mentor Graphics. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. He is also a member of the IEEE and a Life Fellow of ASME International. In April 2006, Dr. Henke received the 2006 Lifetime Achievement Award from The CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. In February 2007, Henke became affiliated with Cyon Research's select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements Henke's ongoing, independent consulting practice (HENKE ASSOCIATES).
An affiliate of the HENKE ASSOCIATES team since 2001, LA-based Dr. John R. (Jack) Horgan co-authored this June 2008 EDA Industry Commentary. Dr. Horgan's prior corporate career has included executive positions at Applicon, Aries Technology, CADAM and MICROCADAM, as well as a stint at IBM. Dr. Horgan is also an editor of EDAcafé Weekly.
Since May 2003 the authors have now published a total of sixty-seven (67) independent articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé. Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at http://www.henkeassociates.net. March 31, 2008 marked the 12th Anniversary of the founding of HENKE ASSOCIATES.