SAN JOSE -- Two separate mergers announced today will further consolidate the EDA industry, and create two potential powerhouses in deep-submicron extraction and analysis. Simplex SolutionsInc. will announce its acquisition of substrate-modeling provider Snaketech, while Frequency Technology Inc. will unveil its purchase of power analysis provider Sente Inc.
A historic by-product of Simplex's acquisition of Snaketech is that two of the EDA industry's most famous former rivals will serve on the same board of directors. Harvey Jones, former chief executive
officer of Synopsys Inc., was already on the Simplex board, while Joseph Costello, former presidentand chief executive officer of Cadence Design Systems Inc., joins that board after serving on
Snaketech's board of directors.
Following the acquisitions, Simplex and Frequency will be roughly the same size, with around 100 people each. Both companies are experiencing rapid growth and are seeking to broaden their ranges of deep-submicron extraction, analysis and optimization tools, although neither is currently eyeing synthesis or physical layout.
"I think there is really an opportunity for someone to build a next-generation serious player in EDA physical design," Costello said. "I think Simplex has the seeds to build the next physical-design
dynasty. That's the fundamental reason I thought this acquisition was the right idea for everyone."
Penny Herscher, president and chief executive officer of Simplex, said Snaketech has a "fantastic" R&D team and strategically vital technology. "It now gives us the ability to have a complete
system-on-chip SoC verification package, because now we can do both interconnect and substrate analysis," she said.
Frequency, meanwhile, is expanding in another direction, since Sente's RTL and gate-level power analysis tools represent Frequency's first step into logical design. Vic Kulkarni, Frequency's senior vice president of marketing and product strategy, said his company will now address the "architectural, logical and physical" aspects of deep-submicron design closure.
The acquisitions are part of a broader consolidation of the EDA industry, said Gary Smith, chief EDA analyst at Dataquest Inc. in San Jose. He noted that smaller companies, such as Snaketech and Sente, are having a hard time getting the attention of potential users. "There are just too many startups, too many tools and too many salesmen," he said. "Today's design engineer has just about given up, except for a few very important tools."
Snaketech, based in Voiron, France, started life with a placement and routing product. But its primary product is now its Layin line of substrate modeling and analysis tools, and that's what Simplex is interested in.
Substrate modeling is a relatively new area that's become important because the parasitics associated with very deep-submicron IC substrates may cause malfunctions or limit SoC performance. It's needed for analog and mixed-signal chips, and as Herscher points out, nearly all future SoC chips will have some analog circuitry.
While the substrate modeling market is small today, Herscher said Simplex expects it to reach $50 million to $100 million in three to five years. The primary competitors are Cadence Design Systems Inc. and CadMOS Inc., which this week will announce its SeismIC substrate modeling package.
Jim Behrens, Snaketech's chief executive officer, said his company was increasingly finding that substrate analysis must be combined with interconnect analysis. "We could have tried to take on that technology by ourselves, but looking at the time and effort that went into it, it seemed to make more sense to partner or merge," he said.
Simplex specializes in interconnect extraction and analysis. The Sunnyvale, Calif., company has also introduced tools for power grid analysis, electromigration and signal integrity. Herscher said that Simplex is currently at a run rate of around $15 million per year, is profitable and is experiencing around 80% revenue growth.
The acquisition brings Simplex's head count to more than 100. Snaketech employs 25, mostly at its R&D center in France. Behrens said the company has "several million" dollars in annual revenue
and is currently profitable.
"We will go for an IPO when the time is right for the company," Herscher said.
Bringing Costello on board was a key element in the deal, Herscher said. "This is the first time Joe Costello and Harvey Jones have been on the same side of the table, and they both bring a huge wealth of EDA experience," she said.
"When this opportunity to work together came up, I was all for it. It's tremendous," said Jones, who is also on the Synopsys board and is chairman of Tensilica. Costello is chairman of analog startup Barcelona Design, and has a full-time day job as president and CEO of mechanical CAD company Think3.
While Simplex is considerably larger than Snaketech, Frequency and Sente are closer in size, with 55 and 45 employees, respectively. With zero product overlap, according to both companies, all
workers are expected to stay. Sente is based in Acton, Mass., and Frequency will retain its R&D centers there and in India.
Frequency, located in Santa Clara, Calif., is currently best known for its Columbus 3D extraction tool and Copernicus interconnect-driven timing and area-optimization tool. The company is now seeking to offer a complete "design-closure" solution, which Kulkarni said will include timing, power, thermal, electromigration, noise and signal-integrity solutions.
"Sente was an ideal candidate to merge with, given their expertise with logical and architectural design closure, and power analysis," Kulkarni said.
"We saw an opportunity to build an operation that will address the larger design-closure space," said Eric Filseth, Sente's vice president of marketing. While Acton, Mass.,-based Sente was not experiencing difficulty because of its small size, "certainly the combined companies are a lot closer to an IPO than either of the original two," he said.
Filseth said there are some very compelling ways in which Sente and Frequency technology fit together. For one, he said, timing depends on chip temperature, which Sente is able to measure. Sente's power analysis can thus considerably boost the power of Copernicus' timing-based optimization.
Further, Filseth noted, interconnect has an impact on power dissipation. Thus Frequency's technology can help make Sente's WattWatcher and WattSmith products more accurate. Kulkarni
said that Frequency already has a combined product road map and hopes to show first "proof of concept" at June's Design Automation Conference.
All existing products, including those from Sente, will still be sold and supported as stand-alone tools, Filseth said.
Neither Kulkarni nor Filseth would comment on revenues for their privately held companies. But both said they're expecting around 100% growth this year. Kulkarni said that Frequency is now finishing its first profitable quarter, and Filseth said Sente has been running "break even."
Smith said Frequency's 1998 revenue was only around $1.7 million, mostly from consulting. Sente's1998 revenue was around $1.6 million. Estimates for 1999 are not yet available.
Simplex's Herscher said her company rarely competes with Frequency in the extraction area, and sees Avant! Corp. as the stronger competitor. Kulkarni responded that Frequency targets a somewhat different market with its focus on high-end ASICs and "deep relationships" with a few selected partners.