SPC and Cadence corporate representatives would not confirm or deny that an acquisition is taking place, but sources said an announcement could be made public as early as this week pending resolution of some legal issues. Reports suggest that SPC would be run as a standalone entity.

"It would be a brilliant pickup for Cadence, depending of course on how much money they have to pay Silicon Perspective," said Gary Smith, chief EDA analyst for Dataquest Inc. (San Jose, Calif.). An acquisition of SPC would instantly return Cadence to the "power-user" tool flow, Smith said.

Personal connections could play into a Cadence-SPC acquisition. Ping Chao, SPC's president and chief executive officer, was a founder of ECAD, which merged with SDA to form Cadence.

Favorite flow

The tool flow currently favored by IC design power users consists of Silicon Perspective's First Encounter for virtual prototyping and floor planning, Synopsys Inc.'s Physical Compiler for synthesis and placement, and Avanti Corp.'s Apollo for detailed routing, Smith said.

A startup only a couple years in the market, Silicon Perspective owned 63 percent of the virtual prototyping tool market in 2000, Smith said, having "stole" it from Synopsys, which held 17 percent of the 2000 market with its Chip Architect tool.

The time is ripe for Silicon Perspective to make, Smith said, because Synopsys has yet to release its follow up to Chip Architect, code named "Hidden Dragon." Synopsys would seemingly have a leg up on Silicon Perspective if Hidden Dragon has features equivalent to First Encounter, because Synopsys has a large sales force and holds key accounts, Smith said.

John Cooley, moderator of the E-Mail Synopsys Users Group (ESNUG), said SPC's First Encounter is tremendously popular among users today but agreed with Smith that the tool may have a short shelf life.

"Cadence and Synopsys are developing their own equivalent tools," said Cooley. "So this makes it a classic make vs. buy decision. An ironic twist is that whoever does buy Silicon Perspective is saying their own development staff isn't up to snuff."

Indeed, Cadence's still unreleased all-in-one tool, Integration Ensemble, is supposed to include technology that does the same things as First Encounter. But Cadence has a very weak track record in developing virtual prototyping systems that are used by customers.

Cadence introduced an RTL floor planner called SiliconQuest in 1995, and shelved it in favor of High Level Design Systems' Top-Down Design Planner (TDP) after Cadence acquired the latter company in 1996.

But TDP was pulled by Cadence for refinement and has not been seen since. Mention of that technology only reappeared at Cadence earlier this year, when the company announced that Integration Ensemble would include design planning technology in addition to synthesis, placement and routing.

"Cadence actually invented the phrase 'virtual prototyping,' which First Encounter really is, but they haven't been able to develop one," said Smith. Cadence never had the fast synthesis technology needed to do design planning, he said. "The company tried a language-based approach in developing TDP, but that never panned out," Smith said.

— Richard Goering contributed to this story.