Cadence Design Systems, the EDA company, is to acquire fellow Silicon Valley company Silicon Perspective (SPC), a privately-held rival.
The cornerstone of the deal is SPC's First Encounter chip prototyping tool which has secured respectable market penetration and for which Cadence currently has no equivalent.
SPC is a five-year-old company employing 70. Its technology enables the creation of prototypes for chips destined to be made by ASIC companies or foundries.
Upon completion of the acquisition, expected next month, Cadence will offer tools based on a bundle of its IC implementation tools, PKS and SE-PKS, and SPS' technology for the development of very large designs with more than one million gates.
Cadence said First Encounter - which includes hierarchical floorplanning, placement and analysis to cycle times for large designs - is already used in conjunction with its own tools by numerous customers.
IC designers can use First Encounter to produce a high-quality floor plan, and then complete the implementation using PKS/SE-PKS.
First Encounter will continue to be marketed for use with non-Cadence physical design technology.
Ray Bingham, president and CEO of Cadence, said: "The acquisition brings Cadence the leading virtual prototype solution available today. SPC's technology allows designers to explore physical implementation feasibility - an early, accurate view of a very large design - in a matter of hours."
Financial details were not disclosed. SPC will operate as a separate group within Cadence.