Synopsys yesterday (11/30/2011) announced that it has signed a definitive agreement to buy Magma Design Automation for $507 million, the largest acquisition in the EDA industry in many years. The acquisition will strengthen Synopsys’ position in both analog and digital EDA tools, at the same time removing a struggling competitor with whom it’s had a less than friendly relationship.

On the financial side Magma represents an easy acquisition for cash-rich Synopsys and an unexpectedly good exit strategy for Magma. Synopsys has agreed to acquire Magma for $7.35 per share in cash, a 27.8% premium over the $5.75 at which LAVA was trading on the NASDAQ the day before the acquisition was announced (it immediately jumped to $7.09 after the announcement). For Q1 of this year Magma reported a GAAP net loss of $(0.1) million, or $(0.00) per share, compared to a net loss of $(3.3) million, or $(0.06) per share for the year-ago first quarter—a slow crawl back from a bad year but hardly enough to keep up with giants Synopsys, Mentor, and Cadence, all of whom are experiencing healthy growth. Needless to say Magma’s Board of Directors unanimously approved the merger.

On the analysts call announcing the merger Synopsys CEO Aart de Geus was upbeat about the synergies between the companies, highlighting the acquisition as an opportunity to expand their R&D talent pool. John Chilton, senior vice president of marketing and strategic development at Synopsys, underscored de Geus’ point, adding, “We really are getting more requests for more technology. Deep-submicron CMOS is very complex in terms of materials, the number of transistor and the parasitics. Tools have to do more.”

The question of overlapping tools loomed large and will remain a matter of speculation until the deal closes in the middle of next year. Chilton said Synopsys would not discontinue any Magma products at the time of the deal closing, though analysis of how to integrate them into Synopsys’ product lines will clearly be front and center for the next several months.

While de Geus said on the call that Synopsys was not motivated by Magma’s strength in any one particular product area, readers are permitted to take that with a grain of salt. Magma’s FineSim Pro simulator for analog/mixed-signal SoCs has reportedly been gaining key accounts that had previously been using Synopsys HSPICE simulator for RF and analog design, which hasn’t really taken off. On the digital side Magma doesn’t offer logic simulation—much to its detriment—but in Talus and Titan they do have a very capable tool flow from RTL synthesis right through silicon implementation, with Talus’ timing analysis capability being especially attractive to Synopsys. Magma’s yield management tools will also be a plus, though Synopsys isn’t lacking there.

According to Gary Smith, chief analyst at Gary Smith EDA, “It’s a great deal for Synopsys,” not to mention Magma. Also according to Smith, FineSim and Talus fill important gaps in Synopsys’ product offerings, “making them whole.” Over the next few years the Magma acquisition should prove to be quite successful for Synopsys. Over time Smith foresees possible problems integrating both Magma’s tools and its engineers. On the tools side, Magma’s data-driven development paradigm differs considerably from Synopsys’, raising the question of whether their tools, however synergistic, can indeed be integrated; if not, which ones survive and which ones receive an End of Life notice? And will the engineers at Magma, arguably not enamored of Synopsys during their long-running legal battle, stay on after the deal closes, or will they cash out and start their own companies? Smith agrees with de Geus that the engineers are the crown jewel of the acquisition. Keeping them happy and on board will be key to the merger’s long term success.

How all this will shake out remains to be seen. Will Mentor or Cadence respond quickly by acquiring one of the dozens of small, capable EDA companies to fill gaps in their own tool flows (probably)? Will Rajeev wind up in an office next to Aart (<1% chance), or will he take the money and start a new company (>90% chance)? Only time will tell. The one certainty is that the big three EDA companies will continue their acquisition binge, becoming stronger and more capable while at the same time providing a happy landing for some intrepid entrepreneurs.

I read two articles this morning that together bookend a singularly bad idea: defunding scientific R&D just when other countries – China in particular – are making it a national priority.

Chinese Incentives

The first was an article in the New York Times titled “When Innovation, Too, Is Made in China”:

“As a national strategy, China is trying to build an economy that relies on innovation rather than imitation. Clearly, its leaders recognize that being the world’s low-cost workshop for assembling the breakthrough products designed elsewhere — think iPads and a host of other high-tech goods — has its limits.”

Starting to put the infrastructure in place, in November the State Intellectual Property Office of China  introduced a “National Patent Development Strategy (2011-2020),” with the goal of surpassing the United States in patent filings in 2011, which looks likely. In 2009, about 300,000 applications for patents were filed in China; the national plan calls for a huge leap, to one million, by 2015– more than double what innovators in the United States filed in the last 12 months.

This may be a government sponsored initiative, but the incentives put in place recognize that real innovation comes from individuals and private industry:

“To lift its patent count, China has introduced an array of incentives. They include cash bonuses, better housing for individual filers and tax breaks for companies that are prolific patent producers.”

These are pretty powerful inducements in a very individualistic, entrepreneurial society that just happens to have a Communist government.

American Defunding

The second article is an op-ed in the LA Times, “Fixing the economy the scientific way.” In its two “Gathering Storm” reports the National Academy of Sciences “has argued strongly that our future prosperity depends on investments made now in research and innovation.” As the authors here point out,

“The basic premise rests on the work of Nobel prize-winning economist Robert Solow, who documented that advances in technology and knowledge drove US economic growth in the first half of the 20th century. If it was true then it’s even more so in today’s information economy.”

Nevertheless between 1964 and 2004 the US government’s support of science declined 60% as a percentage of GDP. China, meanwhile, continues to invest heavily in the future. For example China invested $34.6 billion in the clean energy sector in 2009; the US invested $18.6 billion. Already most of the solar panels and wind turbines being installed in the United States are made in China. This is one technology sector where the United States can’t afford to be left behind, but that’s exactly what’s happening.

This is the place where you make the argument, “In this country we don’t believe in industrial policy, choosing one industry over another. That’s socialism. We leave it to the market to sort things out.” OK, then what do you call R&D tax breaks and tax holidays that even the Reddest states (like Texas) use to lure high-tech industries?

You can make the case that industrial policy doesn’t always work. In the 1980s MITI in Japan heavily bankrolled the semiconductor and computer industries, resulting in Japanese companies becoming dominant in those sectors worldwide. That dominance was eventually overcome by more entrepreneurial American companies, though not without considerable assistance from and strong-arming on the part of the US government.

I’d argue that without MITI’s guidance and backing you would never have heard of today’s giant Japanese semiconductor and computer firms. The same goes for ETRI in Korea and ITRI in Taiwan, both of which nurtured promising local companies to international prominence.

Investing in the Future

As the authors of the LA Times article point out,

“And we need to recognize that the cost of basic science, and the time it takes, require a sustained government commitment because industry can’t be relied on to fund incremental and high-risk science for its own sake without any guarantee of payoff.”

When it comes to R&D, American companies tend heavily toward the D or development side, with pure research being left to universities. This works as long as research grant funding holds up, but that’s now in the process of disappearing. The national Institute on Aging is now turning down more than 90% of scientifically meritorious research grant proposals due to an inability to finance them. Leading research universities such as my alma mater the University of California Berkeley are falling behind as their funding sources dry up. The industries and startups that rely on this research will suffer as a result.

As philanthropist Mary Lasker remarked, “If you think research is expensive, try disease!” As the baby boom generation continues to age, our annual federal Medicare expenditure on Alzheimer’s is projected to reach $627 billion, well in excess of the entire Medicare budget for 2010 ($468 billion). Humanitarian considerations aside, putting tens of millions of dollars per year into Alzheimer’s research could be one of the best investments we’ve ever made.

Don’t Just Say No

The current Republican “Pledge to America” calls for a reduction in federal spending on non-defense-related science research to pre-stimulus levels. The National Institutes of Health, the National Science Foundation and other major sources of research grants are facing substantial budget cuts. This is shortsighted in the extreme.

The whole concept of investing involves putting money into what looks like worthwhile ventures now in the hopes of greater returns later. We need to continue to invest in our future if we want it to be somewhere we’d like to be.

CEO Lip-Bu Tan pointed out that the $350B electronics industry is still growing fast despite the recession, with much of that growth driven by an explosion of applications. Meanwhile the EDA industry is ‘mature’, plagued by slow growth and uninspiring stock performance. There has to be a better way, and everyone in the industry is looking for it. Cadence has an interesting approach.

EDA360—first announced in April—looks to move Cadence beyond design tools to complete designs. The first step is to expand your IP portfolio. Cadence’s recent acquisitions of Denali and Taray were strategic in that regard. Synopsys, with more cash to throw around, is racing down this road through its acquisitions of Virage Logic and Coware, emphasizing IP that’s guaranteed to work together—a major pain point for chip designers. Mentor Graphics has been building its IP portfolio for years, focusing on the embedded space.  Cadence hopes to quickly expand its IP portfolio through “increasing cooperation with [our] ecosystem partners,” including IBM, TI, ARM and TSMC.

“There’s an app for that!”

Having accumulated a lot of IP, what do you do with it? Design stuff, using your suite of EDA tools as a virtualization platform that can turn system-level models into optimized hardware/software systems to support a range of software applications. Cadence has some gaps to fill in its tool flow to pull this off, but EDA360 is a roadmap to more than just more tools.

The key word here is ‘applications’, which CMO John Bruggeman claims need to drive hardware/software design, a process he calls “application-driven system realization.” According to Bruggeman, the current design model is suboptimal at best: “If hardware is designed first and software is appended later, it is difficult to optimize at the system level.” No argument there.

Then in 2006, according to Bruggeman, Apple came up with a new model with its iPhone: design optimized proprietary hardware and software platforms that work together. Application developers had to work within the limitations dictated by these platforms, which arguably limited their functionality, but if they did so everything worked well.

Instead Bruggeman advocates starting with an understanding of the software applications that will run on a given hardware/software platform, defining system requirements and then working down to hardware and software IP creation and integration. This entails reconfigurable hardware driven by software, and not just the operating system. “The OS…has a very generic understanding of the underlying software,” so applications need to take direct control of hardware functions. That involves EDA companies delivering “an optimized IP stack—from bare-metal software to the physical layer—that allows visibility into and control of the hardware from the OS and the application.”

Bruggeman has been advocating silicon-aware IP—not to mention virtual platforms—since his days at Wind River; the company worked with semiconductor firms to develop software drivers to enable VxWorks to work closely with leading processors. Intel saw the value in closer OS/silicon integration, which is why they bought Wind River. At Cadence Bruggeman has extended the vision upward to the application layer. This is hardly uncharted territory, but here the solutions aren’t quite so obvious.

How do you determine application requirements in advance when there are hundreds of thousands of them competing to be on your iPhone? And what happens when you have 60 of them running at once in the background with five of them active? How do you design for that? The answer would seem to be a hardware/software platform that takes its orders from the applications and does, within limits, whatever is needed to service them, either singly or in bulk. That’s what the OS is supposed to do. Perhaps what we need is smarter OSs. The alternative could be “over-designed hardware,” which is what Bruggeman says his approach is designed to avoid. Bruggeman points to Android as an example of an open “multi-application platform,” which does clarify his frame of reference.

How Hard Can It Be?

A system based on a reasonable set of assumptions anticipating the demands made by a well-defined range of applications is not an unreasonable idea. What Cadence is proposing is basically an ESL tool suite customized to generate complete applications. To supply that they’ll have to supply not just the tools but also an embedded software infrastructure—with a full suite of tested, integrated and verified IP—plus an OS, middleware and reference applications. No small task, and not one that any EDA company is even attempting today, though you could argue that they’re moving in that direction. Cadence certainly is.

Supplying reference designs could put Cadence in conflict with its semiconductor customers, who have long had to supply reference designs—right down to the Gerber files—in order to secure design wins. National Semiconductor’s online WEBENCH tools enable you to design fairly complex systems and generate a complete BOM, including non-NSC chips. They’re moving into EDA turf while Cadence plans to move closer to theirs. Bruggeman doesn’t foresee a conflict here, but I see plenty of potential for one.

Being able to supply a range of reference designs is going to require a lot of systems-level domain expertise, something that is in short supply in EDA companies. Semiconductor companies have been acquiring it for years in very specific areas in order to win sockets with key customers. But more generalized expertise is time consuming and expensive to acquire. Xilinx has set out to develop a range of FPGA-based reference platforms for some high-margin industries (medical, automotive, mil/aero) and they’re doing a good job of it, but this is a steep hill to climb.

Are We There Yet?

EDA360 calls for application-driven hardware/software creation, integration and verification. Getting there involves a lot more than filling in some gaps in disjointed tool flows. Even bracketing the idea of application-driven design for the moment, this all requires a smooth ESL design flow from system-level modeling right through tape-out, with early models being able to generate detailed, integrated hardware and software designs. We aren’t nearly there yet, though we’re getting closer (perhaps asymptotically).

Truth be told a lot of the focus on applications is driven by the attractive business model. When you buy a TV, for example, Samsung gets money from you once every 10-15 years. If you buy an EDA tool, you pay annually for seats. But if your TV boots up and you can buy a lot of cool apps for it, Samsung gets a nice ongoing cash flow—and Cadence, if they designed the apps or licensed the IP used to create them. That and better stock valuations are the lure behind applications-driven design.

EDA360 isn’t the only way forward for the EDA industry, and in a lot of ways it’s a restatement of what everyone else has long been doing. From that point of view Cadence has dug it way out of a hole, is executing well and has belatedly joined the party.

To be fair the EDA360 vision goes well beyond what most companies are attempting, and some parts of it are fairly radical. Neither Cadence nor its competitors are currently able to execute on all of it, but it does reveal a reinvigorated company with a vision, one that inevitably will be clarified over time. Cadence has spent a lot of time trying to get everyone in the company to understand the concept and get on board. That’s a necessary first step and in itself a major accomplishment on the part of the company’s new leadership.

As Gary Smith said recently, “This is the best Cadence to date.” I quite agree.

[To watch video interviews with Cadence execs re. EDA360 click here.]

To read the full post–a mini-tutorial on the new low-power wireless standard–on Low-Power Wireless click here.

On the other hand the noise level online is quite high, so it isn’t easy to get your message heard. As a result vendors aren’t willing to pay nearly as much for an online ad as for a print one. As a further result while the print publishing industry is imploding, online ads and media can’t come close to picking up the slack. Business plans for online media are in flux, and no one’s figured out to date (if you don’t count wallstreetjournal.com) how to build a really profitable–much less scalable–online magazine. John claims that print is and will remain King. I claim it’s a wonderful but diminishing resource that will find its niches and live there happily ever after.

Anyway, Karen Bartelson and Synopsys–with Rick moderating–are letting John and me revisit this debate next Monday at DAC in one of their Conversation Central sessions (1:30-2:00 PM PST). If you haven’t tuned in on Conversation Central before, Synopsys hosts a series of half-hour conversations at key trade shows on topics of interest to engineers. You can find directions on how to log in, call in or come in here. At Conversation Central you can also catch up with Ron Wilson, John Blyler, Yatin Trevedi, Harry the ASIC Guy and many other industry luminaries and ask them what they really think. Who knows, they may say something they’d rather not say in print!

I hope to see you there.

Still, there’s trouble in paradise. This Thursday, ARM’s CTO Mike Muller will deliver the keynote address at EE Times’ Designing with ARM virtual conference. According to Mike, despite process scaling down to 11 nm, fixed power budgets may soon make it impossible to utilize all the available transistors on a chip. Without fresh innovations, designers could find themselves at some point in an era of “dark silicon,” able to build dense devices they cannot afford to power.

Muller makes his argument with the following numbers: Compared to a 45nm die, 22nm will enable a 4x die shrink; 11nm, 16x. Again taking 45nm as the reference point, the peak frequency at 22nm can increase 1.6x and at 11nm 2.4x. All well and good. However, while power consumption may remain constant at 22nm vs. 45nm, at 11nm it drops to 0.6. All this means that at a 45nm power budget, at 22nm only 25% of the silicon is exploitable and only 10% is usable at 11nm. Clearly this isn’t an acceptable trend line.

In his keynote Mike will detail both tactics and strategies for lighting up what would otherwise be ‘dark silicon’. Silicon on insulator (SoI) will play a big role—the first ARM-based 22nm SoI test chips taped out last October; SoI goes a long way toward addressing the leakage problem at smaller geometries. Energy-efficient and robust high-density memories will facilitate reduced operating and retention voltages. 3D silicon integration (3D ICs) will enable high levels of energy efficiency and performance improvements.

Other recommendations and predictions: Muller sees Neon++ as the future of vector processing, improving single-threaded performance and extending Neon’s reach to new application domains. Stream programming on the GPU—using the OpenCL programming model—makes possible high-throughput computations on floating-point intensive applications. Mike sees MP++ as “the future of multi-core scalability” and in his talk goes into some of the architectural implications and scalable coherence techniques. He will also discuss the evolution of the SoC interconnect and some of the ins and outs of sub- and near-threshold circuit design.

On the strategy side Muller explains a new approach to dynamic voltage scaling, referred to as Razor, which is based on dynamic detection and correction of speed path failures in digital designs. The key idea of Razor is to tune the supply voltage by monitoring the error rate during operation. Muller proposes a combination of circuit and architectural techniques for low-cost, in-situ error detection and correction of delay failures.

Don’t miss this important and informative keynote. Register now at http://eetimes.com/arm/.

[Full disclosure: I'm the co-chair and moderating two panels.]

I don’t think any of us are predicting the death of print, just its decline, which means an old business model needs to be retooled. What we’re witnessing is the acendancy of digital communications, for which a new business model needs to be created.

Print pubs have always been supported by advertising, which is exploding online–and shortly on portable devices, where Google, Microsoft and others are placing multi-billion dollar bets. Part of the problem print is having is ad dollars moving online. But to Lou’s point the old push ad model–paid, one-way promotional communication–is dying in the world of Web 2.0.

Online the interrupt-driven model–basically passive consumption of packaged content–is being replaced by conversation, connections and shared perceptions. Vendors have lost control of their corporate images to the blogosphere, not to mention Google. To Karen’s point, it’s no wonder that companies are spending a lot less now on branding and hiring “community managers” like Brian.

Ads will continue to work in the B:C space, where demand creation is the order of the day–buy Snuggies, ZhuZhu Pets or some other junk that you didn’t know you needed. In the B:B space–electronics at least–you can spend $5K on a full page print ad telling engineers about your low-power CPLD, but unless they’re in the market for one in the near future, your money is largely wasted.

When they are in the market, engineers will Google what they need and your product will show up along with those of all your competitors. Then they’ll read articles about it in tech trade magazines or sites, check blog conversations, download the datasheet and finally make a decision, on which your expensive ad six months earlier had little impact. Better to spread your ad spend over several months on well targeted, relatively inexpensive online ads and manage the resulting online discussions as best you can.

The Music Industry Model

I don’t think the music industry model works in our space, Yvette. The music industry moguls saw their physical media sales being killed off by online sales and piracy. First they turned their lawyers loose to try to stanch the piracy. Then they had to find a way to sell online. Apple supplied the outlet with iTunes.

iTunes isn’t a publisher but a distributor, and a dominant one. People are willing to pay their prices because (1) they’re reasonably cheap and (2) to date they haven’t really had an alternative. iTunes will have serious competition shortly, and their nice little monopoly profits will take a serious hit.

Apple has a great scam going with iTunes, whose downloads only work on Apple products. iTunes is a great way to sell iPods and provide the content they needed to hit critical mass, which in turn sells more iPods. Vendors may see a bright idea here for themselves, but I don’t see any lessons for bloggers or online journalists.

Vendor-Supported Sites

Since ads won’t pay the bills, many of us look to corporate sponsors to help do so–in the case of Low-Power Design, Mentor Graphics and Silicon Labs have stepped up to the bat, just as Synopsys, ARM, Mentor and others support John Blyler’s and Ed Sperling’s sites. Lou refers to such companies as “patrons of journalism,” which is how I think of them, too.

Ry Schwark at Mentor was clear that Mentor recognizes that tech journalism is going through a turbulent change and Mentor would like to help support tech journalists who have something to contribute. Hopefully they’ll generate active communities with which Mentor would like to be associated. I think this is quite forward looking and makes them a good corporate citizen.

Does that mean that I’ll always give Mentor a glowing write up? Absolutely not. If they come out with a product that’s not ready for prime time, I’ll say so–though perhaps nicely. I’ll leave it to John Cooley to slap ‘em around.

Paid Content

The Wall Street Journal can get away with this, since most of their subscribers expense it anyway. The New York Times tried it and quickly backed off. There’s no way I can see that most blogs and online mags can charge for content, though some do charge monthly subscription fees. We’re not producing songs that people will pay to download. We’re writing up events and packaging them with opinions that readers are very unlikely to pay to read. Sorry about that.

Instead of a pay wall, the Financial Times has launched metered access, where you can read so much before having to pay. According to Journalism Online, “more than 1,300 publishers have partnered with the company, and the first tests of the paid content network will start in coming weeks. In almost all cases, publishers will start by giving visitors access to 10 or 15 articles for free before asking them to pay. The idea is that frequent visitors to a site are demonstrating they value a brand’s content and are the ones most likely to pay a fee for unfettered use of the site.”

It’s hard to see how any but the big dogs can get away with this, but I could be wrong. It looks to be a viable model if you have sufficiently compelling content.

Content Aggregators and Evil Publishers

Personally I think the HuffPost is the future of journalism. It started as a blog with only aggregated content (photo, teaser paragraph and a link). Now they have a legion of unpaid bloggers who write some excellent stuff–including secretaries of state, ex-presidents and foreign heads of state. They’re a combination of fresh and aggregated editorial. According to Forbes, the HuffPost is profitable–from ads–and making so much money that they’re thinking of an IPO. If you get enough eyeballs, the money will follow. But try to do it without the sleazy photos, please.

Charging to link is Rupert Murdoch’s latest brainstorm. If you want to link to a story in one of his outlets, it’s going to cost you. If this flies bloggers will obviously stop linking to stories in Murdoch papers; it it catches on widely, we’re all going to be in trouble.

Charging to link is a dagger aimed at the heart of the Internet, which is all about the free exchange of information and opinions, which in turn is made possible by links. Murdoch sees this strategy as aimed a content aggregators, whom he considers thieves. Personally I think the whole idea is evil, but it may make business sense if it doesn’t generate huge blowback, which I clearly hope it does. Just don’t try this at home, kids.

Still, the days of free content are numbered. If you have compelling content, you may be able to charge for it, and conversely. I predict that a limited number of outstanding sites will make money from content, while the rest will make do with ads and pray for enlightened sponsors.

The dissidents submitted UPF to IEEE’s specification process, which recently yielded IEEE1801-2009, based on UPF 2.0. Cadence submitted CPF to the smaller Si2 consortium, which released v. 1.0 in March, 2007 and v. 1.1 in September, 2008. Si2’s Low-Power Coalition set out last year to try to merge the two power specs.

This afternoon Cadence’s Qi Wang, vice-chair of the Low-Power Coalition Technical Steering Group, addressed the Low-Power Coalition Workshop: Advances in Low-Power Design Throughout the Design Flow. According to Wang, “Interoperability between CPF and UPF to support multi-vendor tools flow is a major focus for Si2’s Low-Power Coalition in 2009.”

Power format interoperability objectives include:

• Identify interoperable subset of commands and options;
• Publish it as a starting point for companies to adhere;
• Provide guidance for commands outside of the interoperable subset;
• Make recommendations for future CPF/UPF extensions.

Wang highlighted both the similarities and differences between CPF 1.1 and IEEE 1001-2009. Regarding similarities, Wang detailed some ways in which UPF has evolved to be more like CPF, including the “supply sets” concept, which is like CPF’s “power domains” concept. CPF 1.1 also has new features that make it more like UPF. Wang explained it was important for the standard to converge, because we “need better interoperability within a mixed-format and mixed-tools low-power design flow.”

The remaining differences are non-trivial. CPF 1.1 provides macro model support for complex IP, and it uses constraints to drive MMMC timing optimization and analysis. UPF has more options to specify isolation and level shifter rules. It also has additional simulation semantics for different power states.

The Low-Power Coalition proposes some interoperable power format guidelines:

• EDA tools must follow the standards strictly
• Companies should adhere to identified interoperability subsets, which it is working to define.

The group plans to send a request to the IEEE1801 committee asking that it migrate UPF to support physically disjoint power domains and equivalent control pins. With the planned release of CPF 1.2 next year, CPF will move much closer to UPF. If the latter continues on a similar path toward convergence, designer engineers will have a much easier time of it going forward.