Zurich’s ISE acquired for up to $115 million

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A spinoff of the Swiss Federal Institute of Technology in Zurich, Integrated Systems Engineering, is to be bought by the US electronic design automation firm Synopsys for up to $115 million (SFr136 million).

ISE is a Zurich-based firm that develops software used to simulate and test semiconductor-manufacturing processes at the atomic level.

California-based Synopsys said it would acquire its competitor for $95 million in cash when the deal closes, with an additional $20 million in cash under a three-year agreement, if ISE’s performance meets business objectives and it retains employees.

ISE, which is backed by private investors, says that as part of a much larger company it will be better able to develop new products and markets.

The high tech firm, which was created 11 years ago, employs close to 100 people in Zurich, California, Japan and Korea.

Flagship product

The company’s flagship product is called TCAD and is used to simulate chip processes before fabrication. Its customers include Intel Corporation and many of the world’s leading chipmakers.

The software helps semiconductor manufacturers reduce the number of potential defects that could occur during fabrication and thereby improves yield.

ISE recently entered the optoelectronics market and has also been gaining market share among manufacturers of sensor chips. Its sales growth has been between 30 and 40 per cent a year over the past four years, despite a global recession and a volatile chip industry.

This was the seventh acquisition for the US-based electronic design automation firm this year. It should close by the end of the year once it has been vetted by the relevant anti-trust authorities.

Rival removed

In published comments following the takeover announcement in October, the market research firm Gartner Group said the acquisition “takes out” one of Synopsys’ major competitors in the TCAD market.

Although Synopsys had a similar product to TCAD, this did not support the Windows platforms. Both supported Unix and Linux environments.

Only two major TCAD competitors are left, namely Celestry Design Technologies (now owned by Cadence) and Silvaco, which offers process and device simulation tools for all the three platforms.

This deal enlarges Synopsys’ market share, especially in Europe, and gives it access to ISE’s customers around the world, said Gartner.

by Valerie Thompson