( ESNUG 558 Item 8 ) ---------------------------------------------- [03/08/16]
Subject: Zacks, MENT, TSMC, Jolly, Icahn, Imgtec, Atoptech, FBI, Calibre, IoT
CATCH-UP GOSSIP: Here's the news & rumors I've heard about EDA and the fabs
since 8/15. (Sorry I fell behind.) Feel free to comment/correct/scold!
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- EDA & SEMI HIT A BUMP: In August 2015, after SNPS posted it's 2015 Q3
earnings, SNPS stock fell from $52.65 down to $44.92 in 6 days. That
was a $7.73 (a 14.7%) drop! But why the big sell-off then? Googling
around I can't figure out why... Anyway, that was 8 months ago...
Then three months ago in December SNPS announced its Q4 profits were
down 20%, so JPMorgan Chase then rated SNPS as "neutral". Now two weeks
ago SNPS posts a 16% drop in Q1 earnings -- triggering Zacks to lower
its own SNPS rating from "strong-buy" down to "hold". It's not good
news when the biggest player of the EDA Big 3 has such problems.
MENT followed suit with its own bad Q3 in November three months ago.
And then last Thursday after its Q4 earning call, Seeking Alpha reported:
"Mentor Graphics (MENT): Q4 EPS of $0.63 beats by $0.16.
Revenue of $337.26 million (-23.2% Y/Y) beats by $1.41 million."
That is, the MENT Q4 numbers were better than what the Wall St. analysts
had predicted. (MENT Q4 EPS was supposed to be $0.47 vs. $0.63.)
"Fiscal 2016 was our most challenging year since the financial
crisis of 2009."
- Wally Rhines on MENT Q4 earning call (03/03/16)
The upside is MENT said their next 12 months will have Revenues $1.215B
and EPS $1.68 beating the Wall St. consensus $1.22B and $1.50 -- meaning
that CY 2016 won't be so bad after all.
Where's all this coming from? Morris Chang of TSMC predicted this back
in eary 2015. The bad news was delivered in three shocks:
April 2015 -- TSMC drops its 2015 sales growth forecast of the
global semiconductor industry from %5 down to 4%.
Intel cuts CapEx $1.3B (-13%). TSMC cuts 1.0B also.
July 2015 -- TSMC drops its 2015 sales growth forecast of the
global semiconductor industry from %4 down to 3%.
October 2015 -- TSMC drops its 2015 sales growth forecast of the
global semiconductor industry from %3 down to 0%.
TSMC cuts its CapEx again. It's now $8M instead
of the $11B it predicted at beginning of 2015.
The upside is the Taiwan-based fab market watcher TrendForce reports
for 2016 that TSMC CapEx will grow 17% to $9.5B, Intel CapEx will grow
30% to $9.5B, and Samsung LSI will stay even at $3.5B -- collectively
making a +5.4% YoY growth of 2016 CapEx.
TrendForce analyst Ila Huang also reported that 2016 worldwide foundry
revenue will grow 2.1% year-on-year to $50.3 billion.
So long story short, both EDA and the fabs hit a bump that rattled them
in 2015, but it's just a bump. After the shock ripples through and gets
worked out, CY 2016 will be back to positive growth as normal.
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- DUELING POLLS: Recently two big and very respectible news organizations
(Pew Research and Reuters) both did their own scientific polls roughly
at the same time on the FBI vs. Apple decryption case:
Pew Research : ################### 38% favor Apple
: ######################### 51% favor FBI <-- huh?
: ##### 11% no opinion
Reuters : ####################### 45% favor Apple <-- huh?
: ################## 35% favor FBI
: ########## 20% no opinion
The only one real take away on this flip-flopping is that the American
public has NOT reached a consensus on this. (And what *I'd* like to
see is survey data showing which side the *techies* favored here.)
In related news, the French parliament yesterday voted 5 years in jail
for tech execs who refuse to decrypt cellphone data in an investigation.
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- FRESH FROM DVCON'16: word is from multiple sources that Lip-bu is going
to acquire Vigyan Singhal's Oski Tech for some unknown sum of money.
My pushback that I told my spies was: "Why? What does Oski have? It's
a consulting house. Their assets walk out the door every night." What
my spies said back was the Vigyan folks could really give JasperGold
use a boost. Plus Oski has been helping the SNPS VC Formal tool mature.
That is, if Oski went over to CDNS, it would screw with SNPS.
My only caveat is how CDNS sets up an Oski acquisition. If Oski has a
3 to 5 year earn out, that's good. If Oski just gets a big lump of
cash -- like what Lip-bu did for Jasper -- it's a bad move by CDNS.
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- TWO DINGS ON ANSS: Waaay back 2010, Intel acquired Virtutech for its
exceptional Simics ISS platform. It lets them run x86 C-based processor
models which aren't cycle-accurate but are crazy fast. Virtutech had
$9M revenues, went for $45M -- nice 5X multiple for an EDA acquisition.
A year later (2011) Intel picked up CoFluent Studio for HW/SW co-design.
Then (right after DAC'15 actually) in August 2015 the 700 engineer Intel
SSG group acquired Docea Power -- an algorithmic power reduction tool
that takes in SystemC/C++ and does architectural tweaks to "save up to
70% of your chip's dynamic power consumption" -- which wasn't just an
idle boast. Doing chip power reduction at the gate-level is too late in
the flow. (Just ask any SNPS Power Compiler or PrimeTime-PX user.)
The only (somewhat) equivalent competing tools are ANSS PowerArtist and
MENT Calypto PowerPro -- but those only do RTL level power reduction.
Clearly Intel SSG saw the need for Docea. Rumors are they paid $17M for
a company that was only making $2.1M -- an 8X multiple for Docea.
The 2nd ding comes from the Docea Thermal gate-level thermal analysis
tool -- which does pretty much what ANSS Apache Sentinel-TI does.
Do you catch that? John "Jolly" Lee's ANSS Apache now competes against
Intel's own internal CAD group on *both* his PowerArtist and Sentinel
lines. But before you go "OMG!!! Losing Intel business!!!" keep in mind
in rough numbers Intel is ~12% of total Apache sales and ~70% of that
is in RedHawk licenses -- so Jolly only maybe lost ~4% of his total
annual Apache sales due to Intel acquiring Docea. Annoying, but minor.
---- ---- ---- ---- ---- ---- ----
- TOLD YA SO!: On December 10th my spies reported in DeepChip that
Silvaco was acquiring the French SPICE variation vendor, Infiniscale.
Five days later, a Silvaco press release confirmed it. Told ya so!!!
---- ---- ---- ---- ---- ---- ----
- FUN QUOTE:
"Any engineer who thinks static timing analysis guarantees that
his design will work in silicon is fooling himself."
- Dan Joyce of Oracle Labs (DAC 06/08/15)
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- WALL STREET EDA SUCCESS STORY!: In other news, Wally is finally giving
Carl Icahn a push out the door by buying 1/2 of Icahn's 16,000,000 MENT
shares for $18.12 per share ($145 million total).
Since Icahn bought MENT at $8 to $9, back of the evelope says that he
(so far) made ~113% on his initial $68 million. What an EDA success
story! "Wall Street investor doubles his money with EDA investment!"
Caveat: Icahn isn't gone yet. He still owns another 8 million in MENT.
---- ---- ---- ---- ---- ---- ----
- IP SHOCK: In early February, Hossein Yassaie stepped down after 18 years
as CEO of Imagination Technologies. Back in 2012, Imgtec shares sold
for $712. They acquired MIPS that year. Yassaie was even knighted by
Queen Elizabeth at the New Year's Ball on the last day of 2012.
But for the past 2 years Imgtec profits dried up and started reporting
losses. Their stock hovered around $200. Then the 2015 sales dropped
-65% Y-to-Y. By mid-January 2016, Imagtec stock bottomed out at $105.
It was a good run, but Wall St. doesn't tolerate losses forever.
In related news, Seeking Alpha posted for ARMH that: "ARM -7.3% after
mixed Q4; royalty revenue up 31%, dividend hike proposed" on Feb 10th;
but since then ARMH rebounded up 15.7%. "Consensus is for revenue to
rise 12% in 2016 to $1.67 billion." Wall St. still likes Simon Segars.
---- ---- ---- ---- ---- ---- ----
- WHAT? NO INTERNET!!?: EDA's resident 1/2 billionare, Dean Drako, of
both Barracuda Networks and IC Manage fame, went on a 10 day trip to the
Serengeti National Park and climbed Mt. Kilimanjaro in January.
And the scary part? Not lions nor hyenas -- but that he actually went
for 10 whole days without Internet access! "Texts and email weren't on
my mind at all. Climbing 3.7 miles above sea level, I totally focused
on not getting killed by one of the 14 rock slides over those last
2 days," said Dean. "It's the hardest thing I've ever done physically."
---- ---- ---- ---- ---- ---- ----
- FUN DATA:
IDC IoT Device Forecast for 2020 for Asia Pacific excluding Japan
Telecom
Infrastructure : # 86M units
: ########## $58,300M
: ############################## ~ ### $677.90/unit
Consumer : ###### 5,160M units
: ############ $69,960M
: ## $13.56/unit
Public Buildings : ####### 6,020M units
: ############ $69,960M
: ## $11.62/unit
Other Buildings : ######### 7,740M units
: ########## $58,300M
: # $7.53/unit
Animals : ########## 8,600M units
: # $5,830M
: $1.48/unit
Home : ########################### 23,220M units
: ################## $104,940M
: # $4.52/unit
Enterprise : ############################## ~ ### 35,260M units
: ############################## ~ ### $221,540M
: # $6.28/unit
IDC predicts total Asia Pacific excluding Japan device market by 4 years
will be $583B (34% of world market) and that 1 out every 5 worldwide IoT
devices will be in China. Estimates IoT CAGR will be ~17% into 2020.
---- ---- ---- ---- ---- ---- ----
- A GO OR NO GO?: It's now Day 12 of the Synopsys vs. Atoptech jury trial
in the U.S. Federal District Court. The EDA rumor mill is abuzz with
gossip of who testified, what they said, what they did not say -- plus
how Aart is supposedly personally guiding the SNPS lawyers, etc.
The weirdest rumor my spies have come up with beyond the usual "ATOP
is going to win because..." or "SNPS is going to win because..." is
that Iliya Pesic of Silvaco (Ivan's son) is very closely awaiting the
trial results to decide whether or not to re-invest in his father's
old failed Silvaco Spider digital PnR tool back from 2010. Why Spider
failed was it was fighting against SNPS ICC/Astro, Magma, Cadence ETS,
Mentor Sierra, and Atoptech -- Spider was PnR tool #6 back then. Now
in 2016, if Atoptech gets wiped out, his Spider could be the #4 in PnR,
if Iliya puts in enough R&D $$$ to get Spider 16/14/10/7nm functional,
plus he then puts some serious marketing behind it. But this scheme
all hinges on Aart successfully knocking out ATOP...
Closing arguments are today, and then the jury gets to decide.
---- ---- ---- ---- ---- ---- ----
- WE ARE SPARTA!: In the emulator wars, after Frank Schirrmeister wrote
that scathing tech rebuttal in ESNUG 553 where Frank found "9 errors
and 22 misses" in Lauro Rizzatti's pro-Veloce analysis in ESNUG 547 #9,
my spies told me that inside Cadence the employees were circulating this
pic of Frank in the movie "300". (I've heard there's also pics of him
with Yoda and as the Pope, but can't get my hands on them.)
---- ---- ---- ---- ---- ---- ----
- SCARY NEWS: Five days ago, Hock Tan, CEO of the new monster big 8,500
employee chip house Broadcom Limited -- which is really old BRCM plus
Avago plus LSI (and possibly soon to be plus Marvell) -- just recently
"discovered" $300M in cuts in the old BRCM he acquired 10 months ago.
Tan now believes he "may be able to even beat" his original plans to cut
$750 million in costs from the combined BRCM/AVGO within 18 months.
---- ---- ---- ---- ---- ---- ----
- FUNNIEST DAC'15 VIDEO:
Saw this on the DAC floor as the Mentor come-on for their Calibre demos.
Who knew that the Most Interesting Man in EDA actually used Calibre?
---- ---- ---- ---- ---- ---- ----
- DO WE TELL TOM BECKLEY?: I got a 1st time source telling me that 3 weeks
from now at the upcoming San Jose SNUG'16, Aart is taking yet another
run at the CDNS Virtuoso monopoly. This "new" SNPS Custom Designer is
code named "Maxwell" (you know, as in the "Maxwell's Equations" fame.)
It's no longer a Virtuoso clone. Instead it looks closer to Laker3.
My first quandry is should I warn CDNS custom IC bigwig Tom Beckley of
this? (Since Beckley's based in Pittburgh, a good 2,608 miles away
from San Jose, he might not have heard about "Project Maxwell"...)
My second quandry is "is this true?"; this is a 1st time source...
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And again, feel free to comment/correct/scold/question anything you see here
by just emailing me directly. And, yes, you'll be ANONYMOUS!
- John Cooley
DeepChip.com Holliston, MA
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