Synopsys gains 100 employees through the acquisition and established TCAD technologies: the DESSIS device simulator and FLOOPS process simulator. It also gains related utilities. Those tools will complement the TCAD technologies Synopsys gained from its acquisition of Avanti Corp., which in the late 1990s acquired the TCAD vendor Technology Modeling Associates.

"ISE has a very strong technology group and technology," said Ed Cheng, vice president of Synopsys' Silicon Engineering group. ISE's tools have traditionally been used by process engineers to find errors in and characterize new fab processes. Cheng said Synopsys will continue selling ISE's tools to process engineers for those purposes, but plans to use ISE's technologies and talent to develop DFM tools.

"At the next technology node there will be printability, systemic as well as random variations," said Cheng. "ISE's TCAD tools are very helpful for not just process technology development. We feel they will be able to give chip designers insights into these defects."

Cheng would not reveal what specifically Synopsys is developing in the DFM area, but did note that Synopsys has been particularly interested in the emerging area of yield improvement.

The acquisition price is approximately $95 million, net of cash estimated to be held by ISE at closing, plus a three- year earn out based on product line performance and employee retention. The maximum potential earn out payment is $20 million.

The transaction is expected to close in November 2004.

Cheng said ISE, which will maintain its offices in Zurich, also has a services business. The branch focuses mostly on training process engineers to use ISE software, and it isn't a characterization or yield service similar to PDF Solutions.

Cheng pointed out that companies like PDF Solutions are potential customers for ISE tools.

Ameritech Research analyst Erach Desai issued a desknote last month that Synopsys was trying to acquire PDF Solutions. That has yet to materialize, and Synopsys and PDF are not commenting. Synopsys acquired Monterey last week.