We enable our customers to design electronic products. Our products and services
are designed to give our customers a competitive edge in their development of
electronic systems, integrated circuits (“ICs”), electronic devices
and increasingly sophisticated manufactured products. Our products and services
do this by optimizing performance, minimizing power consumption, shortening
the time to bring our customers’ products to market and reducing their
design, development and manufacturing costs. Our customers create and sell electronic
products at differing levels of completeness. Our electronic systems customers
deliver entire devices, such as smartphones, laptop computers, gaming systems,
automobiles, servers, medical equipment and networking products. These systems
companies internally develop, or externally purchase, the sub-components for
their products, including printed circuit boards (“PCBs”), which
interconnect all the hardware components, ICs, which are often referred to as
computer chips, and software at various levels which runs on the hardware. Our
semiconductor customers deliver ICs, which include subcategories, such as memory
chips, systems-on-chip (“SoCs”), analog chips, processors and other
types of chips.
We offer software, hardware, services and reusable IC design blocks, which
are commonly referred to as intellectual property (“IP”). Systems
customers use our offerings to develop and integrate software that is key to
the functionality of their products, as well as to design their ICs and PCBs.
Our semiconductor customers use our offerings to design, configure, analyze
and verify ICs. Additionally, some customers license our IP, which accelerates
their product development processes by providing pre-designed and verified circuit
blocks for their ICs.
Our strategy, which we call System Design Enablement (“SDE”), is
to provide the technologies necessary for our customers to develop a complete
and functional electronic product. Our SDE strategy enables us to address the
growing trends of electronic systems companies developing their own ICs as part
of their end product systems, as well as semiconductor companies delivering
greater portions of the systems into which their IC products are integrated.
The development of electronic products, or their sub-components, is complex
and requires many engineers using our solutions with specialized knowledge and
skill. The rate of technical innovation in electronics is swift, long driven
by a concept known as Moore’s Law, which more than 50 years ago predicted
that the complexity of ICs would double about every 24 months. In order to make
our customers successful, our products must handle this exponential growth rate
in complexity, without requiring a corresponding increase in our customers’
costs. Historically, the industry that provided the tools used by IC engineers
was referred to as Electronic Design Automation (“EDA”). Today,
our offerings include and extend beyond EDA tools to include SDE.
Our SDE solutions facilitate the electronic product creation process at four
levels. First, our core EDA offerings enable engineers to complete tasks associated
with the design, analysis and verification of ICs. Core EDA tools and services
are specifically designed to meet the requirements of engineers who develop
different types of ICs. The second level of SDE solutions is IP, which consists
of design IP and verification IP (“VIP”). Design IP is directly
integrated into the IC by the customer as part of its development process. VIP
consists of technologies and methodologies useful for verifying how design IP
is integrated into the IC, but VIP does not become part of the IC product. The
third level of SDE solutions is System Interconnect, and includes tools and
services used for the design, analysis and verification of PCBs, as well as
the packages that encapsulate the ICs for electrical and physical connection
to the PCB. The fourth level of SDE solutions is System Integration, which includes
the engineering tasks associated with designing and analyzing systems, verifying
system functionality, combining software with hardware, or developing new software
for an IC or system prior to its manufacture.
Our products and services enable our customers to design complex and innovative
electronic products, so demand for our products is driven by our customers’
investment in new designs and products. The most promising new opportunities
for us involve enabling the design of electronic systems for machine learning,
augmented reality, virtual reality, internet-of-things, aerospace and defense
and autonomous vehicle sub-systems. Large and existing electronics categories,
such as datacenter servers, smartphones and networking products continue to
provide business opportunities for us as customers initiate new design projects.
Conversely, the decline of previously vibrant categories, and the integration
of previously separate capabilities into a single device, can potentially reduce
our business opportunities. For example, digital cameras and navigation devices
were once independent devices, and are now also available as features on a smartphone.
Likewise, the laptop computer category has been negatively affected by the proliferation
of mobile devices.
Underlying the requirements within any particular vertical market sector is
the availability of rapidly improving IC manufacturing technology. In order
for our customers to take advantage of such advancements, certain of our products
must first be developed to exploit these new manufacturing capabilities. This
dependency means that we must invest significantly in product research and development
to keep pace with the latest manufacturing technology. The demand for new IC
manufacturing technology directly impacts the demand for our newest products.
Another driver for our business is the differentiation, capabilities and benefits
provided to our customers by our products. With the rapid pace of innovation
comes the opportunity for our products to address key challenges associated
with electronic product creation, such as power consumption, performance and
cost. Our products have unique attributes that our customers value. In general,
these attributes can be grouped into broader categories such as quality of results
(in terms of power consumption, performance and chip area), engineering productivity,
tool performance, new capabilities or methods and faster time-to-market. Our
business opportunities are significantly enhanced when our offerings address
these key factors.
Functional verification products are used by our customers to efficiently and
effectively verify that the circuitry or the software they have designed will
perform as intended. Verification takes place before implementing or manufacturing
the circuitry, significantly reducing the risk of discovering an error in the
completed product. Our functional verification offering consists of four primary
verification engines:
JasperGold® formal verification platform
Xcelium™ parallel simulation platform
Palladium® Z1 verification computing platform
Protium™ S1 FPGA prototyping platform
These engines are used for early bug detection, verification of block-level
functionality, verification acceleration and emulation of system-level functionality,
system-level power exploration, analysis and optimization and system-level prototyping
for hardware/software co-verification. Our emulation hardware offering--the
Palladium Z1 enterprise emulation system--provides high throughput, capacity,
datacenter reliability and workgroup productivity to enable global design teams
to develop advanced hardware-software systems. The Protium S1, a prototyping
solution based on Field-Programmable Gate Arrays (“FPGAs”), leverages
a common front end with Palladium Z1 in order to move designs rapidly from emulation
to the prototyping stage for early software development.
Also included in our functional verification offering are products that are
used for verification planning and metric tracking, testbench automation, debugging
and software-driven tests. These products enable our customers to coordinate
verification activities across multiple teams and various specialists for verification
planning and closure.
Digital IC Design and Signoff
Digital IC design offerings are used by our customers to create logical representations
of a digital circuit or an IC that can be verified for correctness prior to
implementation (please refer to the discussion under “Functional Verification,
including Emulation and Prototyping Hardware” above). Once the logic is
verified, the design representation is implemented, or converted to a format
ready for silicon manufacturing, using additional software tools within this
category. The manufacturing representation is also analyzed and verified. Our
digital IC offerings include three major categories: logic design, physical
implementation and signoff.
Our logic design offering is comprised of logic synthesis, test and equivalence
checking capabilities and is typically used by customers to create and verify
designs in conjunction with our functional verification capabilities. This offering
provides chip planning, design, verification and test technologies and services
to customers. The offering includes the Genus™ synthesis solution, a logic
synthesis offering that provides fast throughput while also offering high quality
results, the Stratus™ high-level synthesis solution for system-level synthesis,
and the Joules™ RTL power solution, which delivers fast power analysis
while preserving near-signoff accuracy. We also offer the Modus™ design-for-test
software solution, which reduces SoC test time.
Our physical implementation offering comprises tools used near the end of the
design process, including place and route, signal integrity, optimization and
multiple patterning preparation. The Innovus™ implementation system is
a physical implementation offering that delivers fast design turnaround time
while also delivering improved power, performance and area characteristics.
This offering enables customers to address the technology challenges of the
latest semiconductor advanced process nodes, create a physical representation
of logic models and prepare a design for signoff.
Our signoff offering is comprised of tools used to signoff the design as ready
for manufacture by a silicon foundry, which provides certification for this
step. This offering includes Tempus™ timing analysis, Voltus™ power
analysis, Quantus™ QRC extraction solutions and Pegasus™ physical
verification system. Our design for manufacturing products are also included
in our signoff offering and are used by customers to address manufacturing and
yield issues as early in the product development process as possible.
Custom IC Design and Verification
Custom IC design and verification offerings are used by our customers to create
schematic and physical representations of circuits down to the transistor level
for analog, mixed-signal, custom digital, memory and radio frequency (“RF”)
designs. These representations are verified using simulation tools optimized
for each type of design. The offering includes the design capture environment,
simulation and IC layout capabilities within the Virtuoso® custom design
platform. Other tools in the custom IC portfolio are used to prepare the designs
for manufacturing.
Virtuoso Advanced Node adds functionality to the base Virtuoso package to enable
the use of three-dimensional transistors (“FinFETs”), multiple patterning
and other technologies required for advanced designs. Virtuoso for Electrically
Aware Design introduces a new time-saving paradigm that shortens the loop between
design and verification by verifying designs as they are being created. Spectre®
XPS is a Fast SPICE offering that speeds verification time over previously existing
solutions. Virtuoso System Design Platform enables engineers to design and verify
concurrently across the chip, package and board. Finally, Legato Memory Solution
is the industry’s first integrated solution for memory design and verification.
System Interconnect and Analysis
Our System Interconnect and Analysis offerings are used by our customers to
develop PCBs and IC packages. The capabilities in the Allegro® system interconnect
design platform include PCB authoring and implementation, IC package and System-in-Package
design and signal and power integrity analysis and PCB library design management
and collaboration. Certain offerings also include the simulation capability
within the Virtuoso custom design platform. Sigrity™ analysis tools have
been integrated with our Allegro platform, enabling a comprehensive front-to-back
flow for implementation and full signal and power integrity analysis for designs
featuring high speed interface protocols. These offerings enable engineers who
are responsible for the capture, layout and analysis of advanced PCB and IC
packages to design high-performance electronic products across the domains of
ICs, IC packages and PCBs, to increase functional density and to manage design
complexity while reducing cost and time-to-market. The need for compact, high
performance mobile, consumer and automotive design with advanced serial interconnect
is driving technology evolution for our PCB offering. For mainstream PCB customers,
where individual or small team productivity is a focus, we provide the OrCAD®
family of offerings that is primarily marketed worldwide through a network of
resellers.
IP
Our design IP offerings consist of pre-verified, customizable functional blocks,
which customers integrate into their ICs to accelerate the development process
and to reduce the risk of errors in the design process. We offer many types
of design IP, including Tensilica® configurable digital signal processors
vertically targeted subsystems for audio/voice, baseband and vision/imaging
applications, controllers and physical interfaces for standard protocols and
analog IP. We have significantly expanded our design IP portfolio in recent
years through acquisitions and internal development. During the fourth quarter
of fiscal 2017, we acquired nusemi inc, a company focused on the development
of ultra-high-speed Serializer/Deserializer (“SerDes”) communications
IP.
We also offer a broad range of VIP and memory models, which model the expected
behavior of many industry standard protocols when used with verification solutions
and are complementary to our design IP offerings. VIP and accelerated VIP, which
is used in emulation, are used across the suite of functional verification engines
to verify the correct interaction with dozens of design IP interface protocols
such as DDR, USB and PCI Express. Our VIP offerings are also used in system-level
verification to model correct behavior of full systems interacting with their
environments.
Product Arrangements
We primarily license our software using time-based licenses. Our time-based
license arrangements offer customers the right to access and use all of the
products delivered at the outset of an arrangement and updates throughout the
entire term of the arrangement, which is generally two to three years, with
no rights to return. Our updates provide for continued access to our evolving
technology as our customers’ designs migrate to more advanced nodes. In
addition, certain time-based license arrangements include:
the right for the customer to remix among the products delivered at the outset
of the arrangement, so long as the cumulative contractual value of all products
in use does not exceed the total license fee determined at the outset of the
arrangement; and
use of unspecified additional products that become commercially available during
the term of the arrangement.
A small portion of our software is licensed under perpetual licenses, which
does not include the right to use new technology. Payment terms for time-based
licenses generally provide for payments to be made over the license period and
payment terms for perpetual licenses generally are net 30 days.
Our emulation and prototyping hardware products are either sold or leased to
our customers.
We generally license our design IP under nonexclusive license agreements that
provide usage rights for specific designs. In addition, for certain of our IP
license agreements, we collect royalties as our customers ship their product
that includes our IP to their customers.
Technical Support and Maintenance
Customer service and support is critical to the adoption and successful use
of our products. We provide our customers with technical support and maintenance
to facilitate their use of our software, hardware and IP solutions.
Services
We offer a number of services, including services related to methodology, education
and hosted design solutions. These services may be sold separately or sold and
performed in conjunction with the license, sale or lease of our products. As
necessary, certain of our design services engineers are assigned to internal
research and development projects associated with our design IP business.
As part of our services offerings, we design advanced ICs, develop custom IP
and address industry design issues that may not be solved adequately by today’s
EDA technologies. This enables us to target and accelerate the development of
new software technology and products to satisfy current and future design requirements.
We offer engineering services to collaborate with our customers in the design
of complex ICs and the implementation of key design capabilities, including
low power design, IC packaging and board design, functional verification, digital
implementation, analog/mixed-signal design and system-level design. The customers
for these services primarily consist of semiconductor and systems companies
developing products for the consumer, communications, military, aerospace and
computing markets. These ICs range from digital SoCs and analog and RF designs
to complex mixed-signal ICs.
In delivering methodology services, we leverage our experience and knowledge
of design techniques, our products, leading practices and different design environments
to improve the productivity of our customers’ engineering teams. Depending
on the customers’ projects and needs, we work with customers using outsourcing,
consultative and collaborative offerings.
Our education services offerings can be customized and include training programs
that are conducted via the internet or in a classroom setting. The content of
these offerings ranges from the latest IC design techniques to methodologies
for using the most recent features of our EDA products. The primary focus of
education services is to accelerate our customers’ path to productivity
in the use of our products.
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