SAN FRANCISCO — Ever since Siemens announced its plan to acquire Mentor Graphics three weeks ago, many in the semiconductor industry have been poking and parsing its implications.
They’ve found, thus far, more questions than answers.
At stake is Mentor Graphics’ future as an independent EDA vendor for chip designers. What looks like a significantly reduced market competition among EDA tool companies is also worrisome, now that the only two left standing are Synopsys and Cadence.
Also: Why did Siemens want to buy Mentor? What – if anything – does Siemens know about IC design business? What changes will this deal bring to IC EDA users in particular? Observers are also wondering if this means the EDA industry will lose Wally Rhines, chairman and CEO of Mentor, a legend in the industry.
EE Times caught up with Rhines and Chuck Grindstaff, executive chairman of Siemens PLM Software.
Siemens PLM (Product Lifecycle Management) Software is a unit in Siemens’ Digital Factory Division. In the larger context, Siemens generated revenue of 79.6 billion euros in fiscal 2016 (ending Sept. 30). Siemens’ Digital Factory division, which Mentor will join, registered revenue of 10.2 billion euros during the same period.
We asked both executives about the intent of the deal and how the two companies see its effect on customers.
Rhines won’t retire after the deal
Here’s what we’ve learned.
First, Rhines is not going to disappear. Asked if he will retire after the deal is consummated, Rhines laughed and said, “No.” Confirming that he will become a part of the Siemens team, Rhines said, “I will stay as long as I can contribute.”
We told Siemens PLM Software’s Grindstaff that IC EDA users are concerned about the future of Mentor’s tools, and Siemens’ support for them. He was sympathetic, suggesting that they’re worried “because they don’t know us.”
Siemens’ prowess in manufacturing technologies is well known. The German giant’s Digital Factory division, in particular, strives to offer customers a large portfolio of hardware and software tools to manage the production process. The Digital Factory’s offerings range from machine tools and sensors and the actuators necessary to make a modern factory, explained Grindstaff.
But over the last 10 years, “Siemens is moving upstream,” he noted. Siemens isn’t just bringing automation to machines that manufacture products. Its offerings today include tool chains that help customers design products, simulate and verify them, he explained.
In that context, Mentor’s acquisition allows Siemens to branch out further to the domain of embedded software, SoC designs and EDA tools.
Siemens looks for market expansion
To be clear, Siemens has never been in the IC design tool business before.
As Grindstaff acknowledged, “IC EDA is a market expansion for Siemens.” In reality, Siemens PLM and Mentor already share customers such as car OEMs and tier ones, said Grindstaff. “We’ve worked together as partners for years, and Mentor has always been our favorite.”
Siemens PLM’s focus thus far has been on the mechanical side of engineering, such as computer aided designs and computer aided manufacturing. “With the Mentor acquisition, we can now assemble a full stack of software, mechanical and EDA tools, allowing our customers to connect the best tools,” he added.
So, Siemens wants to become a one-stop shop for all the tools?