Cadence wins PowerPC design pact

Electronic News, Dec 7, 1992

SAN JOSE, CALIF. -- Cadence Design Systems received a three-year agreement from IBM and Motorola which industry analysts estimated approaches $10 million in value for electronic design automation tools and services for the new Somerset design center in Austin, Tex., where they will be used in the design of the next-generation PowerPC family of RISC microprocessors.

Cadence said the agreement calls for integration of its EDA tools with advanced proprietary design tools from IBM and Motorola. Cadence will also provide engineers who will work at the Austin facility over a three-year period, providing assistance to nearly 300 Somerset designers. The tools have already been shipped, said Tony Zingale, Cadence's vice president of marketing for the IC division. Cadence began realizing revenue from the contract in Q3, he said.

Tools to be provided by Cadence include Composer for mixed-level design entry; Verilog-XL for mixed-level logic simulation; Dracula for design verification; and the Virtuoso layout system, including Layout Editor, Layout Synthesis and Layout Compactor. Tools from Cadence, IBM and Motorola will be integrated in Cadence's Design Framework II environment. Mr. Zingale said no other commercial EDA vendors' tools will be used in the project.

Although Mr. Zingale emphasized that the Somerset design center is an independent operating unit which makes vendor decisions apart from both Motorola and IBM, analysts said the deal marks a significant penetration into two major companies which have primarily used in-house design tools.

"It indicates that slowly but surely, Cadence is getting IBM to standardize (on commercial tools), and slowly but surely, they are getting more into Motorola's IC design area," said Robert Herwick, an analyst with Hambrecht & Quist. "It demonstrates that Cadence continues to penetrate this market, both at the expense of in-house tools and Mentor Graphics." Mr. Zingale said only that the competition for the Somerset contract was a "long, drawn-out process" in which Cadence went head-to-head with Mentor. David Chen, Mentor's vice president of marketing, said the contract represented "an important win for Cadence," but noted that it is confined to the single-chip implementation of PowerPC and that the scope of the project "goes beyond microprocessor design," hinting there still may be a role for Mentor software. The Somerset contract has no bearing on Mentor's relationship with Motorola in other design areas (EN, June 3, 1991).

Mr. Zingale said Somerset is mulling the idea of distributing Cadence's design tools with the chipset to end users as a sort of development systems kit, allowing Cadence's tools to "proliferate into the market."

The Cadence executive said the revenue generated by consulting services is a good portion of the contract value, but he would not disclose exactly how much. Mr. Herwick said consulting services typically account for about 20 percent of the revenue.