Acquisitions Build Mentor IP Clout

San Jose, Calif.--Forging further into what it sees as a $100 million market this year, Mentor Graphics enlarged its presence in the intellectual property (IP) industry last week with three relatively small acquisitions and the formation of a new business unit.

Mentor launched its offering of synthesizable, system-level building blocks, or soft cores, by forming the Inventra IP business unit and product lines. Inventra merges all of the company's organizations now delivering cores and other reusable components, including 3Soft and the IC technology centers, with three newly-acquired companies; CAE Technology, Inc., dQdt and Systolic Technology Ltd.

The acquisitions of the privately-held companies were cash-for-stock transactions. The terms for the acquisitions were undisclosed, but the deals were said to be valued at between $2 million and $2.5 million each. All three companies have five to 10 employees, made from $1 million to $2 million in revenue over the last year and were profitable.

CAE Technology is a privately-held, San Jose, Calif.-based developer of reusable soft cores for the peripheral controller market. DQdt (Dimensions in Quick Design Turnaround)--to remain in its Carlsbad, Calif., location--supplies parameterized soft cores and design services for digital signal processing (DSP) functions. London-based Systolic Technology develops reusable soft cores for the telecommunications market.

All three new businesses will report to Mark-Eric Jones, director of Inventra soft cores, as part of independently managed Inventra. Systolic FISP products were marketed in North America by Object Oriented Hardware. Under the terms of the Mentor agreement, Object Oriented Hardware will no longer sell FISP products.

"Mentor is focusing on insourcing and making designers stronger," said Walden (Wally) C. Rhines, Mentor's president and CEO. "Inventra is an enhanced design environment for deep-submicron design and targets design reuse and the single-chip systems of the future. EDA needs to fill the void left by the capability of 0.25- and 0.18-micron designs with reusable IP from a variety of sources."

With IP accounting for more than 8 percent of Mentor's revenues, Mr. Rhines sees it as one of the fastest-growing segments of his company's business and said he felt customers are willing to pay for well-supported IP.

Inventra will be part of Mentor's Silicon Systems division and will be managed independently of Mentor's design tools business to ensure all IP developed is compatible with industry-standard tools.

It reports to Glenn House, VP/GM, Silicon Systems division, who characterized Inventra as a distributor, broker and creator of IP. "Mentor has been a tool company," he said. "Now the triangle is complete, including technologies, tools and IP. We are buying these new companies to fulfill our customers' needs with a practical, single-company approach, but Mentor already employs a spectrum of ownership, distribution and partnership in its business relationships."

Inventra will give design teams working in the wireless communications, computer, telecommunications, networking and multimedia markets access to a catalog of predefined, pre-verified soft cores, as well as physical library products and design products. The products will be sold by Mentor's worldwide sales force and the soft cores product line is available for a one-time license fee with no silicon royalties.

"Mentor Graphics is taking responsibility for bringing the 10-million-gate ASIC with embedded software to the mainstream," said Dr. Rhines. "This is the essence of the integrated systems design strategy. With the creation of the Inventra IP business unit, we are laying the foundations for design reuse to create these ASICs."

Soft cores now available from Mentor include a variety of functions for the design of electronic consumer and communications products, including such processors as the 8051 and 320C50; peripheral interface controllers, such as PCI and USB; DSP functions such as filters, fast fourier and discrete cosine transforms (FFT and DCT), Viterbi and Reed-Solomon decoders, and audio codecs; and communications controllers, such as ISDN, HDLC and linked list controllers.

"Translating a system-level DSP design to an ASIC design is typically a cumbersome and error-prone process," said Tom Cesear, co-founder of dQdt. "Our products bridge the gap between systems engineers and DSP ASIC designers by providing both system simulation models and parameterized architectures, allowing both teams to work with a design view best suited for their environment."

The new business unit will also develop custom soft cores for specific applications. All of the predefined, pre-verified soft cores are delivered via a package, including documentation, synthesizable models, synthesis scripts and a testbench.

Many of the cores feature a system-level testbench, functional simulation model, test vectors and reference designs in silicon. Inventra also provides physical library products, including compiled memories, datapaths, standard cell libraries, I/Os and analog/mixed-signal cells, with a design product line offering the cores and process portable layouts required for complex IP, such as Analog Devices' ADSP-2100 Family Core and Sarnoff's SuiteDecoding MPEG-2 decoder.

Inventra plans to address the integrated system components marketplace with software libraries, board libraries, hard cores and physical libraries. Outbound marketing reports to Brian Barrera. Three product lines include soft cores, reporting to Mr. Jones, and physical libraries and design, both under Tom Griffin.

"Wally has a better idea of the EDA vendors' position in the IP market than anyone else," said Dataquest principal analyst Gary Smith. "Mentor is the only company thinking about software cores, a real important differentiator, and it has no competition in this arena."