Enlarged Synopsys outlines post-acquisition product plans

Enlarged Synopsys outlines post-acquisition product plans
MOUNTAIN VIEW, Calif. — Synopsys Inc. on Tuesday (June 4) laid out its product and financial plans based on its acquisition of Avanti Corp., which it expects to complete later this week. The company's flagship product will be a combined version of the Synopsys-developed Physical Compiler synthesis tool and the Avanti-developed Astro placement and routing system, said chairman and chief executive officer Aart de Geus.

The largest merger in electronic design automation history is essentially complete, following approval of the acquisition by the companies' shareholders and the end of antitrust scrutiny by the Federal Trade Commission. Remaining paperwork is expected to be completed before the 39th Design Automation Conference (DAC) begins Monday (June 10).

The combined company will also receive a short-term respite on the legal front, where Cadence Design Systems Inc. is seeking hundreds of millions of dollars in damages in its long-running civil suit against Avanti related to source code theft. Brad Henske, chief financial officer of Synopsys, said the civil case has been "stayed" for the next 3 to 18 months while lawyers argue before the California Supreme Court.

On the conference call with analysts and reporters Tuesday, de Geus outlined his vision for what he called "Synopsys 3," the post-merger Synopsys. He said that Synopsys' Physical Compiler and Avanti's Astro will be the "anchor point products for our future." But the company's real vision, he said, is to deliver a highly-integrated 0.13- and 0.09-micron design flow, which will presumably be based on Avanti's Milkyway database.

Left unanswered is the question of how open Milkyway will be, or whether Synopsys will ultimately support the OpenAccess Coalition, which is working on a standard design data model based on Cadence's Genesis database.

Melded lines

De Geus also said that Synopsys will roll out a floor planner based on its "Hidden Dragon" project at DAC, and that it will be available as an "upgrade" to Avanti's Jupiter floor planner. He said that Synopsys' NanoSim and Avanti's Star-Sim simulators will eventually be welded into one product, and that Avanti's HSpice will be tightly integrated with Synopsys' VCS simulator.

The combined companies will address three trends, de Geus said. First is the integration of synthesis and placement, brought about by Physical Compiler, which de Geus said is now responsible for over 800 tapeouts. Second is the integration of routing and signal integrity, represented by Astro, which replaces Avanti's earlier Apollo system. Third is the need for an integrated design system, with floor planning and a "rock solid physical database" for 0.13-micron and finer processes.

The focus on Astro puts Route Compiler, Synopsys' homegrown router, on the back burner. Henske noted that Synopsys will no longer sell Route Compiler to new customers.

"Route Compiler is an excellent piece of routing technology, but we've decided to focus first on integrating Physical Compiler and Astro," de Geus said. "We have some important customers using Route Compiler, and we'll work closely with them to determine how to best meet their needs."

The integration of Physical Compiler and Astro is Synopsys' "top priority," de Geus said, and the company expects to deliver the results in a few months.

Next on the list, he said, is the integration of the PrimeTime static timing analyzer with the Milkyway database. "With PrimeTime SI Signal Integrity, we have the leading timing verification tool, and connecting the two provides enormous technical advantages for the customer design flow," he said.

Synopsys' new floor planning product, de Geus said, will be targeted at designs that "push the limits of timing, congestion and area." He noted that Jupiter will still be sold into flows using Synopsys' Design Compiler, while the new product will be sold into "high-end" flows that use Physical Compiler.

The combination of Synopsys and Avanti creates a powerful new opportunity in verification, de Geus said. "The market for analog/mixed-signal verification tools is over $200 million, and it's one we're only now able to address," he said, noting that Avanti's HSpice is the market share leader in Spice simulation and that NanoSim and Star-Sim combined take the "lion's share" in fast circuit simulation.

De Geus noted that Synopsys has integrated its VCS Verilog simulator with NanoSim, and he said it is "only a matter of months before we integrated HSpice in a similar fashion."

The executive decline to respond to a question about Synopsys' plans for Avanti's library business. "We have contractual agreements with Artisan Components Inc. and we're looking at what to do in this situation," he said.

In addition to new products, de Geus said that Synopsys is acquiring a number of Avanti managers, including Avanti president Paul Lo, who will become a senior vice president at Synopsys. Sales staffs will be "consolidated within weeks," de Geus said, adding that sales representatives will be visiting customers with product road maps within the next 30 days.

Revenue picture

Henske reported financial results for Synopsys' second fiscal 2002 quarter ended May 4, and provided new guidance for the combined company. Synopsys reported revenue of $185.6 million in the quarter, a 13.5 percent year-to-year increase, and earnings before goodwill of $25.1 million.

For the third fiscal quarter — a portion of which will include revenue from Avanti — Synopsys expects total revenue of $230 million to $240 million, Henske said. For the full fiscal year 2002, Synopsys is expecting revenues between $905 million and $925 million. And for fiscal 2003, representing a full year of the combined company, Synopsys is targeting $1.3 billion.

Synopsys is, however, expecting transition expenses and one-time charges of approximately $100 million in the third quarter relating to the Avanti acquisition. And Synopsys must also pay $335 million in litigation insurance to protect itself against possible civil damages in Cadence's case against Avanti.