SAN FRANCISCO The revelation Thursday (Sept. 14) that Mentor Graphics Corp. came to the aid of fellow EDA vendor Magma Design Automation Inc. by requesting the reexamination of some Magma patents by the U.S. Patent and Trademark Office (PTO) something that Magma itself had been barred from doing by a court order last year has raised the question of Mentor's motive for doing so.
One intriguing theory is that Mentor (Wilsonville, Ore.) is considering the possibility of merger with Magma. The possibility makes sense on many levels. In an industry increasingly dominated by the top two vendors, Mentor and Magma are ranked third and fourth, respectively, in market capitalization.
"The most glaringly obvious M&A idea in the EDA landscape that has been sitting out there is Magma and Mentor," said Erach Desai, a veteran EDA analyst and principle of
Desaisive Technology Research Inc. "It's a perfect compliment if you think of it on a product line basis. The only overlap would be physical verification."
Even in physical verification, the idea is not without merit. Mentor's venerable Calibre product line is still the industry leader. But recent surveys by Deepchip.com moderator John Cooley have uncovered a lot of interest in the Quartz DRC and Quartz LVS tools Magma developed through technology it acquired with Mojave.
"Mentor's fundamental Calibre architecture is about 10 years old," Desai said. "I'm not saying they don't have a good product. But it's probably, as an architecture getting, long in the tooth. What better way to upgrade your customers and do it relatively seamlessly?"
Gary Smith, chief EDA analyst at Gartner Dataquest Inc., said speculation about a Mentor-Magma merger has been floating around for well over a year. He said he doesn't put much stock in it.
"Actually, Mentor was far closer with Magma a year ago," Smith said. "Then Magma came out with the only credible competition for the Calibre DRC tool. That didn't make Mentor happy."
Even if Mentor is interested in merger, Magma Chairman and CEO Rajeev Mahavan is "in it for the long haul," Smith said. "He wants to be one of the top three when the dust clears the end of this decade."
Smith said Mentor's request for reexamination of the patents sounds more like an attempt to hurt Synopsys then to help Magma.