It’s official: The great IP land grab has begun.
The process actually has been taking place gradually, but has accelerated with Imagination Technologies’ acquisition of MIPS last year and, most recently, Cadence’s acquisition of Tensilica. For makers of semiconductors, four competing IP behemoths are emerging after years of fragmentation within the semiconductor IP industry.
The four big IP players are now ARM, Synopsys, Imagination and Cadence.
This is certainly not a bad thing for the remaining non-public IP companies. The $350M offer by Cadence for Tensilica probably works out to about a 7x to 8x multiplier over annual revenues, which is a very healthy premium. Unlike some previous acquisitions where a company was purchased for a small premium, such as Virage Logic’s 2009 acquisition of ARC International, the magnitude of the Cadence/Tensilica deal demonstrates the economic value and importance of design IP in the semiconductor value chain.
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