EDA Roundup: Big Four Have Stabilized

The EDA players believe that the current year will bring growth for their industry. According to Snyopsys’ management, the outlook for semiconductors is at upper-single-digit growth this year. Industry analysts also expect a CAGR of 9%-11% over the next five years. Besides growth, the industry also believes that the “time-to-market” pressure is back on account of the rapid growth in mobile and consumer markets. Today, the market expects complex products, using advanced technologies at a much faster rate. The industry has seen accelerated adoption of the 28/32 and even the 20/22 nanometer nodes. As a result, the EDA industry is tying up with other ecosystem players to deliver smaller node technologies to the market.

Synopsys’s Financials
Synopsys’s (NASDAQ:SNPS) Q2 revenues grew 16% over the year to $394 million, exceeding the Street’s target of $391 million. EPS of $0.45 was in line with the market’s expectations.

Synopsys is projecting Q3 revenues to be in the range of $378 million–$386 million with EPS of $0.41–$0.43. The Street was expecting revenues of $382 million with EPS of $0.43. For the full year, the company projected revenues of $1.50-$1.53 billion with EPS of $1.70-$1.77 compared with the market’s projections of $1.52 billion revenues with earnings of $1.76 per share.

Synopsys’s Product Innovation
Synopsys recently worked with TSMC to enable designers to incorporate more functionality into their advanced system-on-chips while meeting low power and small silicon area requirements. As a result of the tie-up, Synopsys has been able to develop DesignWare from 180-nm to 28-nm process technologies, thus allowing design teams to integrate standard interfaces into their designs with less risk and improved time-to-market.

Through their tie-up with STMicroelectronics in the 20-nm design environment, they were also able to release a successful tapeout of ST’s first 20-nanometer technology demonstrator test chip.

The stock is trading at $25.35 with a market capitalization of $3.7 billion. It touched a 52-week high of $29.35 in December of last year.

Cadence’s Financials
Cadence (NASDAQ:CDNS) saw Q1 revenues grow 20% to $266.1 million. EPS of $0.02 was also higher than previous year’s loss of $0.04 per share.

For the current quarter, Cadence is projecting revenues of $270 million–$280 million with EPS of $0.09-$0.11. The company expects the year’s revenues to be $1.07 billion–$1.12 billion with EPS of $0.36-$0.44.

Cadence Acquired Altos Design Automation
Recently, Cadence acquired Altos Design Automation, the technology leader in enabling foundation IP development for delivery of complex systems-on-chip (SoCs) at advanced nodes. Altos’ tools help deliver ultra-fast and accurate characterization of memory, standard cell libraries and other foundation IP, generating required models for SoC implementation. Altos has an impressive customer list of more than 30 customers, which includes 11 of the top 20 semiconductor companies. Through the acquisition, Cadence is hopeful of being able to deliver to add to their end-to-end Silicon Realization portfolio by offering greater visibility into the effects of noise, timing and power at each phase of the design cycle, including foundation IP design creation, extraction, SPICE simulation and implementation.

Cadence’s Expanded Offerings
Cadence also recently expanded their relationship with TSMC to provide design for manufacturing services for their clients. They also unveiled their System Development Suite, which consists of two new products, through which they debuted in the field of virtual prototyping.

Cadence is trading at $10.20 with a market capitalization of $2.7 billion. It touched a 52-week high of $11.07 earlier last month.

Mentor’s Financials
Mentor (NASDAQ:MENT) saw Q1 revenues grow 27% over the year to $230 million and exceeded the market’s projections of $226.3 million. EPS of $0.20 for the quarter was above the Street’s expectations of $0.16.

For the current quarter, Mentor expects revenues of $210 million with a net loss of $0.05 per share. They projected the year’s revenues to be over $1 billion with EPS of $0.67. The Street was expecting second quarter revenues of $227.6 million with earnings of $0.16 and full-year revenues of $1 billion with EPS of $1.02.

Mentor’s Board Battles
After his offer of buying the company out at $17 per share was rejected, Icahn finally saw some ray of hope. Recently, all three of his candidates were elected to Mentor’s eight-member board.  Icahn believes that the new board will help drive Mentor to higher cost savings and increased shareholder wealth.

Mentor’s Growth Strategy
Meanwhile, Mentor is focusing on building upon product positions where they are already a leader in market share. For instance, in System Applications, Mentor is a leader and they continued to drive that lead and reported bookings growth of 15% in the segment.

They are also working on being a leader in the development of new and emerging technologies or the application of EDA to new problems, customers and industries such as the automotive and aerospace industry.

Mentor’s stock is trading at $12.30 with a market capitalization of $1.4 billion. It touched a 52-week high of $16.56 earlier this year.

Magma’s Financials
Magma (NASDAQ:LAVA) reported Q4 revenues of $38 million with EPS of $0.09 compared with the market’s projections of EPS of $0.08 on revenues of $35.7 million.

For the current quarter, they are projecting revenues of $36.0 million–$36.5 million with EPS of $0.07–$0.08. The market was projecting revenues of $36.1 million with EPS of $0.08. Magma is projecting to end the current year with revenues of $158 million–$160 million with EPS of $0.38-$0.40. The Street was projecting revenues of $156.7 million with EPS of $0.40.

Magma’s Products
Magma’s market performance is attributed to their strong product portfolio. Their Talus product has established leadership in the mobile application processor market, with successful tape outs of next generation devices, which are complex 28-nm SoC designs with high-performance cores.

In circuit simulation, FineSim SPICE and FineSim Pro reported strong performance as FineSim users ability to scale on multi CPUs in a linear fashion coupled with performance improvement tenfold since its initial release has resulted in over 100 customers which includes more than 70% of the top 15 memory providers.

Their stock is trading at $7.83 with a market cap of $521 million. It touched a 52-week high of $8.08 last week.