ARM is the undisputed leader in Semiconductor IP (SIP). Synopsys is number 2 at around $100 million. Synopsys has had several announcements recently in the SIP area. On March 5th Synopsys and Novelics announced the expansion of Synopsys' DesignWare IP portfolio with the addition of an innovative SRAM-1T embedded memory IP that is implemented in bulk logic CMOS technology, requiring no additional manufacturing costs. As part of a cooperative technology licensing and development relationship with Novelics, Synopsys will also offer a family of low-power and high-performance standard SRAM IP. On April 15th Synopsys announced that its DesignWare USB 2.0 nanoPHY is the first 45 nm USB 2.0 PHY intellectual property to successfully pass the USB Implementers Forum Hi-Speed USB PHY certification. Synopsys' USB 2.0 nanoPHY mixed-signal IP, now available in the 45-nm process node, uses half the power and die area compared to previous USB PHY IP solutions and enables faster time-to-market with reduced risk. On April 28th Synopsys announced the availability of the DesignWare PHY IP for PCI Express 2.0 (Gen II), based on the PCI Express 2.0 base specification.
I had an opportunity to discuss Semiconductor IP with John Koeter, senior director of marketing for IP and Services, and Ed Bard, senior director of IP marketing.
Would you provide us with a brief biography?
John: I am a Group Director at Synopsys. I manage IP Systems and Services. I’ve been working at Synopsys for about 10 years now. Prior to Synopsys I worked at AMD in their embedded processor division and prior to that I worked for 11 years at Texas Instrument primarily in their ASIC group in a variety of different functions. I have a BSEE degree from Cornell University.
Ed how do your spell your name?
Like the great Bard, B-A-R-D.
Would you give us a brief bio as well?
I run marketing for DesignWare Digital IP and IP memory. I have been at Synopsys for 12 years now. Before that I worked at Mentor in various capacities including place and route and physical verification. Before that I was at a small startup that is no longer around. I have a BS degree from the University of Texas at Austin and an MBA from George Fox University.
Editor: Ed works in John’s organization.
After a time startups generally either disappear or get acquired.
This one was acquired and then killed. It was called VR Information Systems. It was acquired in the early 80s by Tektronix when they tried to get into EDA, if you recall that debacle.
Would you give us a definition of semiconductor intellectual property (SIP)?
We define it as predefined circuits that can integrate into a larger SoC design. Typically there are three components in 2D semiconductor IP. There is a digital component which interprets the protocol. There is a physical component, a mixed signal component which interfaces to the outside world from outside the chip. Then there is a verification IP component. At Synopsys we provide a complete solution having a digital piece, a mixed signal piece and a verification IP piece so that people verify that the IP is working correctly in the context of the system. We also offer software drivers for our IP.
So Intel microprocessors and FPGAs from Xlinix and Alters that are integrated into larger systems but not into SoCs would not be considered semiconductor IP?
Generally not! The number one player in semiconductor IP is ARM. The number two player is actually Synopsys. The number three player is MIPS. Overall depending upon the analyst you want to quote, semiconductor IP is around a $1.5 billion business. It is growing according to Dataquest at around 11% per year. Other analysts like Semico have it growing at 15% a year. So we expect it to be somewhere around a $2 billion to $2.5 billion industry by 2011. So a nice healthy and growing industry. Synopsys, as I mentioned, is the number two player in this space.
In terms of the overall segments of semiconductor IP, there are probably three or four that are of significance. The largest segment in semiconductor IP is microprocessors. That’s a segment that is dominated by ARM with their ARM cores. The second largest segment within semiconductor IP is what we call wired interfaces or connectivity IP. That is the segment which Synopsys has the leadership position. We are the number one player within that segment. The third largest segment within the semiconductor IP domain has been memory, embedded memory both SRAM and non-volatile. Synopsys has just recently entered the embedded memory space in conjunction with a partnership with a company called Novelics in southern California. We are seeing a lot of interest and traction in our offerings there. That’s kind of a snapshot of the semiconductor IP market and the leading sub-segments in that market.
The EDA Consortium has sized the semiconductor IP market at $265 million for 4Q 2007, a 6.3% decrease from the fourth quarter in 2006. This is about 16% of the overall EDA market. There has been some discussion in the EDA blogosphere as to whether semiconductor IP should be considered part of or separate from EDA. Do you have any thoughts on this question?
I guess we believe it should be part of the overall EDA industry because if you look at the fundamental value of semiconductor IP, it is really getting complex SoCs to market quickly which is the fundamental role of EDA as well. From a Synopsys perspective semiconductor IP and EDA tools are really solving the same basic problem which is getting complex SoCs to market quickly, reliably and with quality. From our standpoint it is natural and fair to consider them in the same bucket. And it is certainly synergistic at Synopsys. For example, we recently said in our last earnings release that out of the top 20 customers, 17 of those customers are very, very large IP customers as well. So they clearly see a lot of synergism and value from having these tools and IP from a single vendor.
How much of Synopsys revenue falls into the semiconductor IP category?
Last year we announced $97.9 million. I think our overall company revenue was somewhere around $1.1 billion to $1.2 billion. The semiconductor IP piece is in the neighborhood of 10% of the business. We can provide the precise figures but that is off the top of my head. Our semiconductor IP business is just under $100 million.
Editor: Synopsys revenue for 2007 was $1.23 billion.
How many people are in the semiconductor IP group?
We have 400 people in the semiconductor IP group. There are 250 in the mixed signal space. One of the old things you might think about Synopsys is that we are the digital company or the synthesis company but actually we have a strong presence in both tools and IP in the mixed signal area. Mixed signal hard IP is the fastest growing part of our overall semiconductor IP business.
Are those 400 people technical people or does that number also include sales and marketing?
That’s a great question. It is 400 engineers. It does not include sales and marketing personnel.
Some people divide semiconductor IP into those who produce off-the-shelf IP and those who develop and produce customized IP. Is this a fair division and does Synopsys offer one or both?
I think it is a fair characterization. Synopsys’ philosophy is to have a product which is very parameterizable, very configurable such that it can go into many different applications. But it is user configurable. As a result of that we really try to build IP so that we build it once and sell it many times. You know that it is the key to really scalable semiconductor IP business. If you start selling semiconductor IP that is customized for every engagement, you are losing in our opinion one of the fundamental values of semiconductor IP which is being able to accelerate your time to market (TTM) with a very proven solution thereby reducing the risk of your overall SoC design.