Cadence buys IBM's design-for-test tools business

Cadence buys IBM's design-for-test tools business
SAN MATEO, Calif. — Bolstering its position as the EDA industry's leading supplier, Cadence Design Systems Inc. has purchased the design-for-test technology and group personnel of IBM Microelectronics for an undisclosed amount of cash. Cadence has also signed a technology development pact and a tools license with IBM.

Lavi Lev, executive vice president of Cadence's IC business, said the purchase of IBM's operations represents Cadence's first foray into the design-for-test (DFT) tool market.

"It was no secret that DFT was a hole we needed to fill," said Lev. "We bought IBM's tools related to test synthesis, testability analysis, test generation, test manufacturing and diagnostics. The deal also includes the 70 people in Endicott, N.Y. and intellectual property associated with the DFT group."

The move places Cadence head-to-head in yet another market with Synopsys Inc. and Mentor Graphics Corp., both of which offer test tools. Synopsys poses a threat to Cadence's position as EDA market leader following its purchase earlier this year of Avanti Corp. and its tool suites that compete against Cadence's tools in place and route, analog design and other areas.

"We have just finished the deal with IBM and are aggressively putting together a product road map to commercialize these tools," said Lev. "Most of the tools are not process-dependent but some of them are and we will need to commercialize those products for broad use."

To create tools for designs in 90-nm and finer process geometries, it will be critical for EDA companies to work with silicon innovators like IBM, Lev said.

More deals

To that end, Cadence has also signed two other agreements with IBM. The two companies said they plan to collaborate on future EDA technology to address the design challenges at 90 nm and below. Lev declined to identify the tool areas in which the companies will collaborate.

In a third agreement, Cadence has prepared a broad tool license that will allow IBM to use an undisclosed number of Cadence tools for a set amount of time. "They are purchasing a collection of tools and access rights to our technology," said Lev. "It is a large and broad deal to give them access to the technology they need."

Lev would not specify the tools IBM will access or how much it paid for the license. But Cadence did not provide the broad license in exchange for IBM's DFT business, he said.