By Ed Sperling

ARM introduced a 2GHz, dual-core version of its Cortex A9 embedded processor. Does that sound like the market dominated by Intel?

Yes is the correct answer. And that explains why Intel introduced a high-end SoC version of its Xeon processor aimed at embedded communications—one that comes with a small footprint and lower power. It’s one of ARM’s strongholds. There’s nothing like a good fight to get everyone in the holiday spirit.

And with the Intel Developer Forum on tap next week, you won’t have to wait long to see fireworks. Intel is already gearing up for battle, streamlining its internal organization by dividing the empire into two parts—products and manufacturing.

But in any reorg there are winners and losers—often for reasons that make no sense outside the company. (Sometimes they don’t even make sense inside the company, but that’s another matter.) Pat Gelsinger, Intel’s former CTO, a longtime company evangelist and one of the earliest proponents of IDF apparently didn’t see much of a role for himself in the newly reorganized Intel. He bowed out one week before IDF to take over a division at EMC, the enterprise storage and security company. He was still listed as one of the IDF keynoters until this week. Intel’s stock dropped on the news. Ouch.

Actel updated its Q3 guidance to investors. The new projection is that revenues will be flat to up 3%. That’s instead of the old guidance, of -2% to up 4%. It’s nice to see those negative numbers go, isn’t it? We may survive this downturn after all.

Chartered’s board recommended that the company be sold to ATIC International Investment Company, the Abu Dhabi government’s investment group, in an effort to raise necessary investment capital and to allow the foundry to achieve global scale. The board said the offer appeared to be “fair and reasonable.” No surprises here, other than the initial offer.

For anyone working on the manufacturability side of semiconductors, the joint deployment by Mentor Graphics and Applied Materials of the OASIS.MASK should represent a milestone in data reduction. OASIS, which stands for Open Artwork System Interchange Standard, reduces the size of mask data files by about half. That, in turn, speeds up manufacturing because just transferring that amount of data can slow systems down to a crawl.

Also on the manufacturing side, TSMC chose Synopsys’ HSIM simulator for its sub-40nm memory IP. The simulator will be used for timing, power simulation, dynamic IR drop and EM analysis.

The talk of the design industry this week was Magma Design Automation’s future, as detailed in the company’s SEC filing on Monday:

“Our independent public accounting firm has issued an opinion on our consolidated financial statements for the fiscal year ended May 3, 2009 that states that the consolidated financial statements were prepared assuming we will continue as a going concern and further states that our recurring losses from operations, stockholders’ deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern…Our future is dependent on our ability to execute our plans successfully or otherwise address these matters. If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code.”

At least some investors think there’s some life left in the company, though. Its stock was higher all week than immediately after the announcement.

On a more positive note, Virage Logic ’s sales were higher in the second quarter than in the first. License revenues were up 18% even though royalties were down in direct correlation with wafer shipments. But tapeouts are on the rise even if chips aren’t being produced yet, a positive sign of things to come. The company also introduced volume-production proven SiPro PCI Express PHY IP stemming from its relationship with AMD.

Synopsys rolled out Galaxy 2009 with twice the design implementation and signoff throughput, along with multicore and multi-corner/multi-mode technology. It was the second Galaxy announcement in less than a week.

Synopsys also joined forces with the Common Platform folks at Chartered , IBM and Samsung as well as ARM to collaborate on ways to deliver a low-power processor architecture, integrated design flow and system-level IP on the Common Platform’s 32/28nm process.

Cadence claimed first-silicon results on the Common Platform’s 32nm process. That was the good news. The bad news came in the form of financial results, showing a loss of $74 million in Q2. Revenue was $210 million. But things are looking significantly better for Q3, narrowing the loss to no more than a penny a share.

Mentor jumped into the Google Android and embedded Linux market in a big way, snapping up a small developer—Embedded Alley —and inking deals in preparation of what many believe will be an explosive growth market.

In the foundry world, the machinery is beginning to churn again. TSMC ’s Q2 is still lower than the same period in 2008, but it’s 88% higher than in Q1. Net income is up 1,468%. And yes, you did read that correctly. Charterered Semi ’s revenue, meanwhile, was up 43 percent over Q1. The company still posted a net loss of $39 million , but it said that was a substantial improvement over Q1.

By Ed Sperling

Let’s start with the bad news and get it over with first. Cadence cut 225 positions, or about 5% of its total work force. The cost to the company will be about $20 million to $25 million, with most of that recorded in the second quarter.

The job cuts are not surprising, considering the restructuring that has been under way at Cadence. What is surprising, though, is the company’s announcement that it will invest less in DFM and “other infrastructure areas of the business.” No, we don’t understand exactly what that means, either.

Synopsys held out an olive branch to competitors involved in system-level modeling with its Catalyst ecosystem. Granted, this is a good move for everyone. Pulling together all the pieces into an interoperable whole is good for the industry and a step in the right direction. But you also have to figure that Synopsys will benefit most from this move.

Mentor Graphics held its User 2 User conference this week. These are the kinds of meetings we love—real engineers with real issues and real attitudes. The keynote, delivered by Walter Ng at Chartered Semiconductor, focused on the challenges ahead in design. Translation: Restrictive design rules ahead, at least until EUV lithography becomes commercially viable. All the king’s horses and all the king’s men cannot make this one all better, no matter how big the ecosystem or how rich the players.

TSMC’s board unanimously re-elected Morris Chang as chairman. That must have taken a lot of thought. Especially one day after the company paid out a dividend to stockholders. Did we miss something or is the downturn over?

But hang onto that thought before you start choking on your brown-bag lunch. Chartered Semiconductor updated its guidance to better-than-expected numbers. It’s coming in at older process nodes, but it’s hard to complain about business when wafer shipments are increasing 60% over first quarter.

And finally, Intel invested $43 million in UQ Communications, a Japanese WiMax services company. If it will sell more Atom processors, it’s worth it. But what’s with all the spending by Intel all of a sudden. It just bought Wind River, too.

By Ed Sperling

Design for manufacturing has been talked about for at least the past five years, but somehow it always seemed to be a problem that would be dealt with by the foundries or internally with a company’s own fabs.

Two things have changed since then. First, almost all companies have jettisoned their digital fabs—the remaining holdouts are IBM, Intel, Samsung, Toshiba—which means they no longer get information back on a second-by-second basis from the fab. And second, creating SoCs has become so complicated that tools are necessary to help guarantee the chips can be manufactured with decent yield to meet shrinking market windows.

At 45nm, DFM has become the norm. At 32nm, it will likely not even be called DFM anymore. It will simply be part of the integrated tools flow. That was the hidden message during a recent ISQED panel that looked at whether DFM was marketing hype or a secret weapon for foundries and developers. In reality it is neither. It is the formalized resurrection of a communications channel between the foundry and the design team that disappeared with the internal fab, along with some automated ways of implementing that feedback.

Walter Ng, vice president of design enablement alliances at Chartered Semiconductor, said his company began working in earnest with DFM at 65nm, which is about two process nodes after the hype began about design for yield and design for manufacturing.

Since then, virtually every sector of the system-level design industry has put its stake into DFM. Luigi Capodieci, president of Global Foundries—the AMD foundry spinoff that has backing from a United Arab Emirates venture fund—said DFM is no longer an option. It is now a requirement. That view was shared by executives at Mentor Graphics, Atmel and Virage Logic.

And for the skeptics who insisted for years that DFM (termed design for marketing even by some high-ranking EDA executives) was a ploy by EDA vendors to sell more software rather than bridging the communications between the front and back ends of the design process, increasingly it looks as if they were wrong.

If you think things are bad, be glad you’re not in the Taiwanese foundry business—where the pain level is strangely uniform.

TSMC’s sales dropped 59.5% in February compared to the same month last year, and 7.5% compared to January. How many ways can you spell ouch? 

UMC’s numbers are down 56.9 percent in February 2009 vs. the same period in 2008. That’s pretty close. In fact, it’s remarkably close.

This kind of information is only available in Taiwan. SMIC, based in Shanghai, and Chartered, based in Singapore, don’t report monthly sales numbers.

Nevertheless, there was at least some encouraging news out of Chartered. It said that sales seem to be stabilizing and wafer starts appear to be increasing for Q2. 

There is evidence of this showing up in other parts of the market. U.S. retail sales, excluding big-ticket items like cars, show modest increases in areas like clothes and consumer electronics. Numbers were up in January and February. It certainly wasn’t a robust gain, but it wasn’t negative, either. That will translate into new design starts sometime in the next few months, which barring any more major drops will start this whole cycle rolling again.

Design activity has to begin at least six months prior to any turnaround, which means that if the overall economy is expected to show growth in 2010,  electronic designs have to begin by mid-year—perhaps even sooner.

None of this is perfect, however. Why, for example, did National Semiconductor just announce plans to cut 26% of its workforce? At least part of that can be explained by closing of an assembly and test plant in China and a fab in Texas. Too much capacity is expensive, and we wouldn’t be surprised if National ultimately begins outsourcing some of its work to foundries. Yes, it’s analog, but is it still more efficient to run fabs yourself, even if they’re fully depreciated, when TSMC and UMC are begging for business?

Meanwhile, in the FPGA realm, chip design is getting so complex that EDA vendors are finally beginning to find inroads. This is a market previously owned by tools from the FPGA vendors, which they readily gave away to customers at little or even no cost. That worked fine before the industry got to 90nm, and at 45nm it’s tough enough even with the best of tools.

Mentor introduced its Precision Synthesis Tool family for Altera’s Stratix and Arria families. Our guess is that you can expect to see a lot of activity in this market in the near future, and not just from Mentor. Synopsys’ purchase of Synplicity gives it a vested interest in the FPGA market, as well.

–Ed Sperling