The calls and emails are still coming in for more information on the SNPS / LAVA acquisition: Magma customers, ecosystem partners, lawyers, and even a government agency. Is it just me or is this event getting a little too much attention? Maybe we are bored and need a little excitement? Or is this really a turning point in EDA history?
View attachment 2871
The most interesting conversations were with the lawyers trying to profit from it. Interesting enough, not one of them I talked to had any idea what EDA really is and why this acquisition is good for the semiconductor ecosystem.
In regards to the product overlap and market segment monopolies discussion; Will Synopsys assimilate the Magma product line? Of course they will. Synopsys is the number one EDA brand for a reason. They spend millions of dollars every year on company and product branding. Let’s not forget how many companies Synopsys has assimilated thus far: EDA Mergers and Acquisitions Wiki . But for every product that Magma has there are plenty of start-ups waiting in line to fill that parking space. Take simulation for example, check out the Spice and Fast Spice Vendors Wiki and see for yourself.
View attachment 2872
One of the big advantages of being Magma was that they were NOT Synopsys or Cadence. Ask any of the former Magma sales guys, which is not hard to do since there are so many of them. Now dozens of under-funded “emerging” EDA companies can fill that role and emerge in a much more profitable fashion. Which brings us to another important PRO acquisition point, big EDA companies did not get to be big by organic growth. Inorganic growth, growth by acquisition, is how Synopsys, Cadence, Mentor, and even Magma got to be what they are today. If we don’t promote feeder fish EDA companies, where will future big EDA fish growth and innovation come from?
The most compelling PRO and CON acquisition point is pricing. Magma has been the “affordable” EDA company since day number one, climbing to the number four position by under cutting Synopsys, Cadence, and Mentor. If you ask me why Synopsys paid a premium for Magma, which they absolutely did, it is to bring our ASPs back to a scalable level. PRO for the EDA industry? Absolutely. CON for the semiconductor companies who will either have to pay a more reasonable price for the tools that help them generate $300B+ annual revenues or work with feeder fish EDA companies on new innovative tools that will enable faster growth for both the EDA and semiconductor industry.
View attachment 2873
What happens if this acquisition does NOT go through? The Magma sales pipeline is broken, ask any current or former Magma sales guy. Customers will buy the Magma Fear, Uncertainty, and Doubt pitch Synopsys and Cadence guys are no doubt selling. My bet is that Magma stock dips below $5 and gets assimilated anyway. If you think I’m wrong put an iPad3 where your mouth is!
<script src="http://platform.linkedin.com/in.js" type="text/javascript"></script>
<script type="IN/Share" data-counter="right"></script>
View attachment 2874
View attachment 2871
The most interesting conversations were with the lawyers trying to profit from it. Interesting enough, not one of them I talked to had any idea what EDA really is and why this acquisition is good for the semiconductor ecosystem.
In regards to the product overlap and market segment monopolies discussion; Will Synopsys assimilate the Magma product line? Of course they will. Synopsys is the number one EDA brand for a reason. They spend millions of dollars every year on company and product branding. Let’s not forget how many companies Synopsys has assimilated thus far: EDA Mergers and Acquisitions Wiki . But for every product that Magma has there are plenty of start-ups waiting in line to fill that parking space. Take simulation for example, check out the Spice and Fast Spice Vendors Wiki and see for yourself.
View attachment 2872
One of the big advantages of being Magma was that they were NOT Synopsys or Cadence. Ask any of the former Magma sales guys, which is not hard to do since there are so many of them. Now dozens of under-funded “emerging” EDA companies can fill that role and emerge in a much more profitable fashion. Which brings us to another important PRO acquisition point, big EDA companies did not get to be big by organic growth. Inorganic growth, growth by acquisition, is how Synopsys, Cadence, Mentor, and even Magma got to be what they are today. If we don’t promote feeder fish EDA companies, where will future big EDA fish growth and innovation come from?
The most compelling PRO and CON acquisition point is pricing. Magma has been the “affordable” EDA company since day number one, climbing to the number four position by under cutting Synopsys, Cadence, and Mentor. If you ask me why Synopsys paid a premium for Magma, which they absolutely did, it is to bring our ASPs back to a scalable level. PRO for the EDA industry? Absolutely. CON for the semiconductor companies who will either have to pay a more reasonable price for the tools that help them generate $300B+ annual revenues or work with feeder fish EDA companies on new innovative tools that will enable faster growth for both the EDA and semiconductor industry.
View attachment 2873
What happens if this acquisition does NOT go through? The Magma sales pipeline is broken, ask any current or former Magma sales guy. Customers will buy the Magma Fear, Uncertainty, and Doubt pitch Synopsys and Cadence guys are no doubt selling. My bet is that Magma stock dips below $5 and gets assimilated anyway. If you think I’m wrong put an iPad3 where your mouth is!
<script src="http://platform.linkedin.com/in.js" type="text/javascript"></script>
<script type="IN/Share" data-counter="right"></script>
View attachment 2874
Last edited:
