FREMONT, Calif. Fearing competition with its customers in the silicon intellectual property (IP) arena, Avant! Corp. has tabled its Galax! subsidiary and is preparing to roll out a new IP partnership program with its customers, EE Times has learned. As part of that change, Avant! has decided that it will not complete its planned purchase of Arcus Technology Ltd., an IP provider based in Bangalore, India.
Meanwhile, Cypress Semiconductor Corp. stepped in this week to purchase Arcus Technology in a combined cash and stock transaction totaling $20 million.
Vic Kulkarni, the former head of Galax! and now general manager of the Silicon Business Unit at Avant!, said Avant! had quietly shelved its Galax! subsidiary nine months ago along with its plans to merge with Arcus because customers perceived Avant!'s move into IP creation as a competitive threat.
"Shortly after we signed a letter of intent to acquire Arcus last year, we started talking to quite a few customers around the world about our plans to build Galax! as a chipless IC company," Kulkarni said. "We found that many of our tool customers, especially those in networking, were very negative about any EDA vendor getting into IP creation they view it as competitive. We don't want to be a competitor to our customers."
Kulkarni said Avant! and Arcus are currently sorting out the financial aspects of ending the planned merger.
Avant! has disengaged from the Arcus acquisition and from the whole notion of owning an intellectual property company, Kulkarni said. Instead, Avant!'s Silicon Business Unit will offer standard and custom libraries as well as TCAD tools to a variety of customers via a new program called "IP Club."
"An IP Club member will be a customer who we have enabled with our library and tools to create end-user solutions," said Kulkarni. "An IP Club member will have the rights to distribute timing and design tech libraries to their end customers. Essentially, what they will do is harden their IP with Avant! libraries and tools and create timing models for their IP. By distributing those kits, not the GDSII but only the frame data, they will be enabling their end customers."
Customers who want the complimentary GDSII data will have to license it from Avant!, Kulkarni said. "Essentially, this allows us to be in the food chain of the end customer," he said. "The IP Club partner has a way to distribute his IP data and we can sell our libraries and new tools to more end customers."
Avant! will make a formal announcement about IP Club and introduce initial IP Club members in the very near future, Kulkarni said.
Gary Smith, principle EDA analyst at research firm Dataquest Inc. (San Jose, Calif.), said semiconductor vendors frown upon EDA vendors who offer cores and outsourcing.
"Vendors are basically saying 'If you do outsourcing, you don't do cores, or we won't buy from you because that makes you an ASIC house a competitor," said Smith. "EDA vendors can offer cores or outsourcing but not both."
In purchasing Arcus, Cypress gains datacom/telecom protocol and logic-based technology which complements Cypress's capabilities in high-speed physical layer technology, PLLs and specialty memory, Cypress officials said.
The acquisition will expand Cypress' available market with high-growth, high-margin T1/T3 access protocols, Sonet, and Dense Wave Division Multiplexing (DWDM), the company said.
Arcus develops a range of intellectual property, product designs, and packaged devices for datacom/telecom markets, and provides ASIC solutions for WDM, Internet Protocol over Sonet, framers, mappers, PDH multiplexers and switching technology. Its customers include Northern Telecom, Lucent, Tellabs, and other leading communications companies.
"Arcus' intellectual property positions Cypress to take advantage of the rapid growth in WAN and WAN-access bandwidth," said T. J. Rodgers, president and chief executive officer of Cypress (San Jose, Calif.). "We will be able to offer more highly integrated products that provide greater value to our customers. We also gain the design talent of approximately 70 engineers needed to support our drive to become a broader-based data communications company."