Daniel Nenni

As I mentioned in my blog IP Companies Still in Play, Virage Logic is the one to watch, and Virage is on the move again by acquiring processor core company ARC International, making Virage #3 in the Design IP Market (ARM#1, Synopsys#2). Other  successful Virage acquisitions include the Ingot DDR technology, the Impinj non-volatile memory franchise, and the AMD/ATI silicon proven interface IP.

The ARC acquisition is not only accretive, it is very strategic. The IP sales cycle begins with the processor core, moves to interface IP, and ends with the physical IP. From a sales point of view, Virage will get early access to the customer with ARC, followed by the complete Virage IP portfolio, which is a one stop SoC (System on  a Chip) solution. Literally, you will have to go to multiple IP vendors to design your SoC if not for Virage. After working with BAE Sales, Virage Logic, ARC, Perfectus, and eSilicon, on an “IP Portfolio” sales strategy for the past year, I know this first hand.

Meanwhile, back at the IP Ranch: ARM produced an impressive 50+ press releases so far this year, MIPS shrank inorganically by selling the Portugal based ChipIdea group  (they acquired for $147M in cash) to Synopsys for a whopping $22M, and Denali probably spent $1M+ at the Design Automation Conference on a big ego exhibit and their annual DAC party (my wife and I had a blast!). So all-in-all an innovative year so far for Semiconductor IP Companies, NOT!

When the #2 embedded processor company (MIPS) acquired the #1 analog IP Company (ChipIdea), and became the #3 Design IP Company it was heralded as the “New wave of IP leadership”. Every SoC design has embedded processor cores and Analog IP, right? The incredible overlap would make an integrated sales strategy a simple thing, right? WRONG! Technically right does not mean organizationally right, especially in the case of MIPS and ChipIdea. You can blame conflicting cultures, you can blame the market downturn, I blame the prima donna embedded processor sales culture. A similar thing happened when ARM acquired physical IP vendor Artisan Components for close to $1B. Artisan had revenues of $68M at the time so the $913M price tag doomed this acquisition before the ink dried, ARM and MIPS can’t even spell the word ACCRETIVE.

Embedded processor IP is the largest semiconductor IP  market segment and every one of the 150+ ARC customers can use the interface and physical IP that Virage Logic provides. The majority of the 300+ Virage customers can also use the embedded cores ARC International provides. Virage Logic is the low power leader in interface and physical IP, ARC is a low power leader, just a great fit all around.

Virage is also a TSMC early development partner and everybody knows that designing to the 40nm and 28nm process nodes is a complex and costly experience. But, if you are the first silicon proven IP provider on a process node you will experience the Foundry Multiplier Effect, meaning the initial financial outlay will be dwarfed by the resulting revenues (first customers on the early foundry process nodes are the high volume, top semiconductor companies). Virage Logic is on the move, Virage Logic is definitely the Semiconductor IP company to watch!