Credit Suisse First Boston analyst Erach Desai believes that Chrysalis Symbolic Design Inc had revenues of around $15m in calendar 1998, and that Avant! Corp paid around $60m in stock to acquire the company earlier this week (CI No 3,655).
Chrysalis pioneered the formal verification market, but according to Desai its market share dropped from a 64% share in 1997 to 42% in 1998. The primary reason for the drop was Synopsys Inc’s entry into the market in February 1998 with its Formality product line, which took it from a standing start to a 41% market share in 1998. Avant! got a bargain, Desai thinks, but it nevertheless faces the task of integrating the technology with the products it acquired from VLSI Technology Inc’s Compass Design Automation subsidiary in 1997 (CI No 3,217). Avant! will also need to develop new sales channels for the product.
CSFB believes the formal tools market will grow 60% to about $50m this year, and is looking for a 50% growth in Synopsys’ Formality business – which, however, is only likely to account for around 4% of the company’s fiscal 1999 product revenue. It believes Avant’s foray into this front-end market will not seriously impact Synopsys’ performance.
