Open-Silicon acquires design services firm

SAN FRANCISCO—Fabless ASIC house Open-Silicon Inc. announced Tuesday (Jan. 12) it acquired design services provider Silicon Logic Engineering (SLE) to enhance the company's derivative IC design capabilities. Financial terms of the acquisition were not disclosed.

SLE's 23-member team, based in Eau Claire, Wis., joined Open-Silicon effective Dec. 7, 2009, Open-Silicon (Milpitas, Calif.) said. SLE, founded in 1996 by senior engineers formerly with supercomputer company Cray Research, was most recently owned by Tundra Semiconductor, which was acquired by Integrated Device Technology Inc. last June.

Naveed Sherwani, Open-Silicon's president and CEO, said in an interview that the company acquired SLE in order to boost its front-end capabilities at the company for designing derivative ICs. Derivative ICs—new products created by modifying original designs—represent a growing business for Open-Silicon, Sherwani said. Auxiliary design teams which typically handle derivative designs for chip firms were largely cut during the downturn last year, and chip companies have demonstrated that they would rather hire an outside vendor than assign derivative designs to their top design teams, Sherwani said.

Derivative designs tend to have higher margins than most products because most of the non-reoccurring engineering work has already been amortized by the original product, Sherwani said.

"Right now many executives are reluctant to do derivatives because they need to keep their engineers focused on the next project," Serwani said. "So people are giving up a lot of revenue and customers are forced to use a product that is not optimized for their needs."

Sherwani said he doesn't expect chip companies to replace auxiliary design teams, even as the economy improves, because it's more cost effective for them to outsource derivative designs. The company uses a network of network of design services partners, now augmented by the SLE team, to offer customers the best fitting design solutions on the market, he said.

Since its founding, SLE has provided the ASIC industry with architecture, RTL design, design verification and physical design services, Open-Silicon said. SLE's team has an average of more than 20 years of engineering experience on designs up to 50 million gates, Open-Silicon said.