Simucad spins out of Silvaco with eye toward IPO

Silvaco has spun off its IC design tools under the well-established EDA brand Simucad, with plans to take Simucad public and make it into a broadline EDA supplier that competes with Cadence, Synopsys and Mentor Graphics on all fronts.

Ivan Pesic, Silvaco's owner, president, and CEO, will head the Simucad spinoff while maintaining full ownership of Silvaco, which will now focus solely on TCAD (technology computer-aided design) tools.

Silvaco and Pesic are somewhat of an anomaly in Silicon Valley. Pesic started Silvaco 31 years ago with his own money and since then has never sought outside funding. What's more, Pesic and his crew developed an overwhelming majority of the company's tools in house. As a result, the company has been highly profitable and has made Pesic very wealthy. So why go public?

"There is no pressure for me to go public, but part of the reason I want to go public is to reward my employees," he said. "There are people who have been with me for 15 to 20 years. The timing is also very good. The economy's about to rebound, we have all our offices established, products finished, and all the people we need, a solid customer base, so I told my guys let's do it now."

The company has grown as large as it can as a private company, Pesic said, hitting the $30m to $40m earnings plateau where further growth becomes difficult. With money from an IPO, Pesic wants to grow Simucad rapidly and make it a broadline EDA-tool supplier.

"Within the year we will enter the market with [digital] synthesis, place-and-route," Pesic said. "I do R&D the old-fashioned way—I used to work for HP and they trained me well—I have short-term R&D and a long-term R&D strategy." The company will continue to develop new tools in-house rather than acquiring them from startups, he added.

Simucad is spinning off with a well-established user base and tool line, with its greatest strengths in the analogue and mixed-signal arena. Simucad's portfolio includes SmartSpice, Harmony, and SmartSpiceRF for analogue, mixed-signal, and RF-circuit simulation.

The company also has Silvaco's PDK-based IC layout design flow: Gateway, Expert, Guardian DRC/ERC/LPE/LVS, and HIPEX for schematic capture, schematic-driven layout, physical verification, and parasitic extraction.

The company will also offer Silvaco's 3D, physics-based interconnect-modeling software for extracting parasitics of interconnects and passive components. Digital CAD products include AccuCell and AccuCore library-characterisation products, as well as Simucad's original tool lineup: the SILOS Verilog simulator and HyperFault mixed-level fault simulator.

Of Silvaco's 250 employees, 220 will work solely for the new Simucad, while the rest will work for Silvaco and will continue to develop TCAD tools. The company is planning on releasing a new set of TCAD tools later this year.

Pesic noted that both sets of employees will reap the benefits of the Simucad IPO, planned for Q4 barring any major economic woes.

In addition to owning Silvaco outright, Pesic is also well known for defending his company's software IP against infringement by others. The company has won trade-secrets suits against Avanti and Circuit Semantics. Silvaco currently has suits pending against some Circuit Semantics users for continuing to use the simulator that incorporated Silvaco's simulation technology. That litigation will be handled under the Silvaco banner, he said.

Pesic chose the Simucad brand because it is one of the oldest and most well known IC-design brands in the EDA industry, whereas the Silvaco brand is more associated with TCAD.

Starting in 1981, Simucad helped pioneer Verilog simulation. After an acquisition by HHB Systems, later acquired by Daisy in the 1980s, Simucad reemerged in the early 1990s after a management buyout. Silvaco then acquired Simucad in 2003, mainly for the company's popular SILOS and Hyperfault simulators, but also for its name.

"I'm under not under pressure, I'm going to control the situation," Pesic said. "We've spent a year preparing this. I have a large customer base and I want to ensure they are taken care of properly [through the transition]. We're not a typical EDA startup, our business plan is as solid as a rock….I'm going to be around for another 50 years."