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MIPS boosts analog IP line with Chipidea acquisition

Posted: 29 Aug 2007 ?? ?Print Version ?Bookmark and Share

Keywords:analog IP? MIPS line? Chipidea acquisition?

MIPS Technologies Inc. has acquired privately held Portuguese firm Chipidea Microelectronica S.A. for $147 million in cash.

Chipidea, whose annual revenue was $32.8 million in the quarter ending June 30, supplies analog and mixed-signal IP for the wireless, digital consumer and connectivity markets.

Despite the complexity of analog technologies and the risky nature of the intellectual property business in general, Chipidea has been a rising star in the design IP market. Chipidea's revenue grew at a compound annual rate of 38 percent between 2000 and 2006.

The acquisition of Chipidea will effectively make MIPS "the second largest design IP vendor" in the world, after ARM, John Bourgoin, president and CEO, told EE Times.

The integration of microprocessor and analog IP is a visible trend in system-chip development and the addition of Chipidea's analog IPs to its portfolio is a move by MIPS to strengthen its position and expand its customer base.

'A nice fit'
MIPS, thus far, has made "zero investment" in analog technologies, Bourgoin acknowledged. "That's why we think that this is such a nice fit."

MIPS chose Chipidea for two reasons: its strong customer base and its financial robustness. Moreover, two-thirds of MIPS' customer bases overlap with those of Chipidea. They include: Toshiba, Sharp, NXP Semiconductors, STMicroelectronics, Zoran, Qualcomm, Texas Instruments and others.

Currently, 88 percent of analog design is being done internally at most leading semiconductor companies. Nonetheless, Chipidea has successfully competed against in-house analog design teams, possibly because it anticipated a fundamental change in the chip industry similar to the shift away from the traditional practice of designing processing cores proprietarily. Today, most chip vendors prefer to license third-party cores made by companies like ARM or MIPS.

Bourgoin sees the same trend emerging in the analog IP world.

"When it comes to analog, it either works or it doesn't work," said Bourgoin. But for many chip vendors, analog is "not a differentiator." He questions the expense of so much time and money to design basically identical wireless or power management chips.

"Analog is hard to do. It requires special skills," explained. Bourgoin. "Over the last 10 years, Chipidea's 250 engineers have delivered a variety of analog IPs in GDS II format that actually work." GDS II is a de facto standard for IC layout data exchange.

Pleased customers
Indeed, Chipidea has plenty of happy customers. "Seventy-five percent of Chipidea's business is generated by repeat customers," Mark Tyndall, MIPS VP, business development and corporate relations.

For MIPS, besides the quality of its product, Chipidea is attractive because it's not yet another struggling IP start-up. "Chipidea has the ability to create profit in cash and generate its own revenue growth," said Bourgoin.

Exactly one year ago, MIPS hired Tyndall to look for acquisition targets. Specifically Bourgoin told Tyndall to seek companies involved in: control plane (such as another processing cores); IP (including analog); embedded memory and data plane (such as DSP). "I told Mark any of those four quadrants would be fair game, including tools and interconnects."

Tyndall came back to Bourgoin with a recommendation to buy Chipidea. "Analog represents both exciting and highest growth opportunity," Tyndall said. "Many captive semiconductor companies including IBM are slowly releasing its analog work to the outside market over the last couple of years." Tyndall also added that Chipidea already has 13 out of the top 15 semiconductor companies as customers.

Bourgoin believes the integration of the two companies is straightforward.

While the consolidation will happen in the area of sales, finance, legal, HR and marketing, design teams of MIPS and Chipidea will continue to exist in parallel. Chipidea will become a newly formed business group within MIPS Technologies, its complete product portfolio continuing to be sold under the Chipidea brand. Jose Franca, Chipidea's current CEO, will assume the role of president and general manager for the new business group and has been appointed a member of the board of directors for MIPS Technologies.

Distinct strengths
Except for a few commonalities in drivers and tools, MIPS and Chipidea design teams have very different knowledge bases, with "not a lot of engineering overlap," said Bourgoin.

MIPS' processing cores will continue to play a critical role in digital connected home products such as small routers, DSL, DTV, cable/satellite set-tops and digital still cameras. Chipidea already serves a similar base of customers looking for analog IPs for wireless, power management, HDMI, USB and others.

With a formidable portfolio of analog and digital IP cores, would MIPS/Chipidea ever compete with fabless chip companies such as Broadcom whose business is in further integration of everything for their SoCs? "No, never," said Bourgoin. While MIPS is in an IP business, Broadcom is not. "Broadcom is better off outsourcing analog IPs to us, rather than developing its own analog IPs for their SoCs as they do now," said Bourgoin. "Because analog is not really a differentiating factor."

- Junko Yoshida
EE Times




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