IP set to become big business for eda companies

Then the SoC arrived and the game changed. Where companies were once designing relatively simple chips, the SoC brought complexity – a number of previously disparate elements were being integrated on one piece of silicon. With the SoC came the emergence of IP – predesigned functional blocks which could be imported into the project. Synopsys was probably the trailblazer when it came to developing IP and acquiring IP providers. Today, the company generates an estimated 20% of its annual revenues through sales of IP. But it appears Cadence is working hard to develop a similar strategy with a number of recent acquisitions – the latest of which is Evatronix' IP division – which it has brought into its silicon realisation group. Cadence says the development of its IP portfolio is freeing designers to work on product differentiation, rather than 'me too' designs. But there seems to be another reason – Cadence sees revenue. CEO Lip-Bu Tan says IP is an important business opportunity and a sector which can generate 'meaningful revenues' for the company. Depending on who you talk to, the semiconductor IP market is worth $1.8billion and it's growing. Capturing a reasonable share of that market would bring a nice boost to Cadence's revenues – currently $1.3bn. Will the ambitions be achieved? Even though Cadence claims its IP Factory concept offers a 'complete SoC IP solution', it says there is still work to be done and that it wants to offer IP of a better quality than companies such as Broadcom develop in house. Cadence's next step might well be putting IP blocks together to deliver integrated – potentially custom – solutions. SoCs are getting larger, design is getting more complex, time to market and market windows are getting shorter and the investment is eye wateringly high. It could be an attractive move.