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英飞凌收购赛普拉斯、DAC大会上对Mentor荣誉CEO的访谈
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BRIAN SANTO:

I’m Brian Santo, EE Times Editor in Chief, and you're listening to EETimes on Air. This is your Briefing for the week ending June 7th.

我是EE Times主编Brian Santo,你正在的是EETimes全球联播。这是截至67日的一周热点新闻故事

Today we’ll be talking about…

今天我们要谈的是......

… a $10 billion dollar acquisition that seemed to come out of nowhere – Infineon bought Cypress Semiconductor, also…

......突然冒出来的一笔价值100亿美元的收购案 -- 英飞凌买下赛普拉斯半导体......

… the Design Automation Conference – DAC – was held earlier this week. If you know what’s happening with design tools, that gives you a good handle on what’s happening with the semiconductor industry.

......设计自动化大会(DAC)于本周早些时候举行。如果知道设计工具正在发生什么变化,你就可以很好地把握半导体行业的发展。

While we were at DAC, we got to talk with Wally Rhines, who ran EDA vendor Mentor for … a long time; he’s now CEO emeritus. He’s someone who knows the business inside and out. In a moment, we’ll hear what he has to say about the state of affairs in the electronics industry.

DAC大会上,我们与Mentor荣誉CEO Wally Rhines进行了交谈。他执掌EDA供应商Mentor有很多年头了,是一个对EDA行业里里外外都了如指掌的人。稍后我们将听到他对电子行业发展的看法。

But first – Infineon’s bombshell announcement. Our London correspondent Nitin Dahad filed the story. Junko Yoshida, one of our global editors, talks with him about what the deal means.

但首先来听听英飞凌的重磅新闻。由驻伦敦记者Nitin Dahad来讲述这个故事。我们全球编辑之一Junko Yoshida与他讨论这笔交易意味着什么。

以下是英文原稿,Enjoy!

JUNKO YOSHIDA:

Hi, Nitin. I'm here in Las Vegas. I guess you're back in London from Taiwan. Is that right?

NITIN DAHAD:

Absolutely, yes. I've just come back from Taiwan, and did quite a lot there, and you'll be reading more about that later.

JUNKO YOSHIDA:

As soon as you came back from Taipei, you weren't even recovered from your jetlag yet. And boom! This big announcement happens. Infineon to buy Cypress Semiconductor at $10 billion. What's going on here? What motivated, do you think Infineon to buy Cypress? Can you walk me through?

NITIN DAHAD:

Yes. So first of all it's worth noting this is the biggest acquisition that Infineon has made. And it catapults Infineon to number eight chip manufacturer globally.

So what was the motivation? Well, we need to be aware of the megatrends. The chip industry is going through its usual cyclical downturn. And as a result, we've seen a wave of acquisitions in recent months to both their revenue and reach. In its earnings, Infineon recently indicated flat revenues. So I think the main motivation is that sort of suitable addition to the business that would help meet both short-term and long-term revenue and business goals.

JUNKO YOSHIDA:

So wait, Nitin. Infineon has not been so active in big M&A activities for the last several years, while others were jumping into deals.

NITIN DAHAD:

Yes. This is a big deal. As we've reported in EETimes, there's been a number of such big acquisitions, especially in connectivity. And we'll talk about that in a few minutes. But this acquisition enables Infineon to offer a wider portfolio and what they say is to link the real world with the digital world and open up the automotive and IoT markets.

JUNKO YOSHIDA:

Nitin, if you have to name three, what are the three things among Cypress product lines or technologies that attracted Infineon most?

NITIN DAHAD:

I would say it's connectivity components, microcontrollers and the NOR flash memories. Connectivity is clearly important for IoT and ultimately wireless. Microcontrollers for the automotive electronic architectures and infotainment. And automotive memory, which is a hot growth area. I mean, I had a demonstration of some of their memory in Nuremberg last year. So they are sort of demonstrating why that sort of failsafe memory and that faster reaction memory is quite important.

As one analyst told us this week, $400 million of Cypress automotive business comes from infotainment, microcontroller and connectivity solutions. But Infineon's ADAS solutions were also being reinforced by the growing demand for NOR flash memory for autonomous driving.

JUNKO YOSHIDA:

Got it! So just to be clear, microcontrollers Infineon will be from Cypress are more of infotainment MCUs rather than safety-critical microcontrollers, which Infineon already has, right?

NITIN DAHAD:

Yes. I think there's a broad reach, and I was sort of looking at Cypress website, and there is a microcontroller obviously for various applications. But yes. Particularly, this ADA's for infotainment and things like that.

JUNKO YOSHIDA:

So as we cover various news, we realize that NXP just bought Marvell's WiFi and Bluetooth, and now we hear Infineon is buying Cypress. Why do you think that connectivity is suddenly getting hot among chip companies? For Infineon, is this an IoT play or an automotive play?

NITIN DAHAD:

I think it's bigger than that, but yes, definitely IoT and both automotive. But let's just look at connectivity. It's huge everywhere just now. With 5G already starting to roll out, I think many industries are really looking to see how they can benefit from 5G's play beyond just the consumer. People talk about faster speeds, etc. But we're looking now into enterprise and industry and the applications there. So all the chip players have been talking for a while about developing products for a smart, connected world. So for example, smart cities, smart factories, smart mobility, smart buildings, smart everything. You name it, we'll have smart.

JUNKO YOSHIDA:

Right.

NITIN DAHAD:

And as long as it's a business case, connectivity is going to be the vital link for all of these.

JUNKO YOSHIDA:

I guess this is my last question: I read the Infineon/Cypress deal will make Infineon the biggest supplier of automotive chips. Bigger than NXP? How so?

NITIN DAHAD:

I find that interesting, actually. And actually it was backed up by one of the analysts we spoke to this week at IHS Markit. He said the combined automotive revenue of Infineon and Cypress was almost $5 billion in 2018.

JUNKO YOSHIDA:

Wow!

NITIN DAHAD:

So the Munich-based company will likely become the number one automotive semiconductor supplier in 2019.

While other European companies that we report on, like NXP and ST, also have a big play in automotive, I understand it's mainly going to be the wider reach and boarder solutions enabled by the acquisition that would put Infineon ahead.

JUNKO YOSHIDA:

Thank you so much, Nitin.

NITIN DAHAD:

Thank you, Junko.

BRIAN SANTO:

Junko and executive editor Dylan McGrath attended the Design Automation Conference in Las Vegas earlier this week. DAC is one of the longest-running shows in electronics. Reporting from the show floor, the two discuss how the US-China trade war was casting a long shadow over… well… everything.

JUNKO YOSHIDA:

So you and I are at DAC. This is day two of DAC. And we're trying to figure out what we have learned so far. What strikes you as the biggest news here?

DYLAN MCGRATH:

Well, I think, as we were talking before, obviously we've heard a lot so far about various technical advances in the EDA realm. But the fallout from the China-Huawei-US fiasco is really casting a shadow over everything here. And that's kind of what's on everybody's minds. And that's what we've been trying to get more information about.

JUNKO YOSHIDA:

Right. But most of the executives we've talked to, they're not going to use a word like "fiasco," right?

DYLAN MCGRATH:

No, no. Again, as we were discussing, the prevailing sentiment-- or at least the answer that they give-- is that everything will be fine. It's going to be worked out. A little bit scary or nerve-wracking right now, but there's just too much money at stake for all sides not to come together and work everything out and live happily ever after. Which sounds great, but I personally am really not so sure at this point what's going to happen.

JUNKO YOSHIDA:

Yeah, that's true. You know, I was actually a moderator for the 2019 DAC Under 40 Innovation Awards panel. And one of the guys who was on my panel was a no-show. And his name is Xu Chen. He's a professor at ICT, it's China's science academy in Beijing. And he did not come because... I think the official reason is his visa didn't arrive in time. At least by Friday. But he may have chosen not to come because the IEEE president last week, actually I think it was last Wednesday, sent out a letter to its members informing them that employees of Huawei, it's because they are on a so-called blacklist-- "entity list" they call it-- that we are not allowed to trade. So that specifically the IEEE president said that the employees of Huawei are not allowed to participate in IEEE's review process or editing process or standards and so forth.

That had a huge backlash. And then actually the president did walk back Sunday, saying that the IEEE as an organization did talk with the US Commerce Department and got the clarification. So it's okay.

But it's like, clearly they jumped the gun.

DYLAN MCGRATH:

Absolutely. They jumped the gun. You wonder why they did that without clear guidance.

JUNKO YOSHIDA:

Yeah, without checking with the government first. It's sort of like you're a step ahead of the facts. I did actually talk to several people about this, mostly people who are in academia, or actually some in industry, but they are all-- many attendants here are actually IEEE members. And they really had strong words about this. One guy said, Well, IEEE president should have been impeached or at we should elect a new president. And others are saying it's really problematic. Because more and more, the organizations like the IEEE have become US-centric. And when you think about the engineering world is so global, it's just sort of unthinkable. Another guy said, You know, organizations like IEEE should protect engineers, should not be in the business of excluding certain parts of the membership body.

But I think the best quote that I got was from one of the university professors. He said, You know, you've heard of... in French it's called Medecins Sans Frontiers. I think in English it's Doctors Without Borders.

DYLAN MCGRATH:

Yes.

JUNKO YOSHIDA:

So an IEEE organization like that should function as engineers without borders.

DYLAN MCGRATH:

Just personally knowing very little about the whole situation, like I said, I'm surprised that they did that without some clear guidance from the government. It wouldn't surprise me a great deal if that they were directed to do that by the government. But knowing that they just needed to clear it up with the US Commerce Department and have since reversed position.

JUNKO YOSHIDA:

Could have waited.

DYLAN MCGRATH:

Yes.

BRIAN SANTO:

While they were at DAC, Junko and Dylan caught up with Wally Rhines, the CEO Emeritus of Mentor. Dylan got first crack, and asked about how US-China relations are affecting the electronics industry.

WALLY RHINES:

Any time that free trade is disrupted is a worry for everyone. And as you may have heard Tony Hemmelgarn say, he is very optimistic this is going to be worked out. There is just too much to lose by all parties involved.

You asked for parallels. I had spent four years as chairman of the technical advisory committee for semiconductors and semiconductor manufacturing equipment that advises the Department of Commerce on export controls, which is exactly what you heard about, the applying for validated licenses. And at the time I became chair of that committee, the US had a dominant market share in semiconductor manufacturing equipment. And over the next 10 years, that share diminished greatly in favor of Japan. And one of the key reasons cited by customers was that the Japanese were very efficient in reviewing and granting licenses, and it was a matter of days to get a validated license in Japan.

And in the US, they also could be efficient but there was too much uncertainty. You would get a license in less than a week, three times in a row, and then the next one takes two months. Well, the customers couldn't tolerate that. Because you had to get a license for spare parts. You had to get a separate license for the data manual to use the equipment from the equipment itself. And so we became what's called the vendor of last resort. That is, see if you can buy the equipment from a Japanese supplier. If not, buy it from the US. And so it was very damaging, and we certainly don't want that to happen again.

BRIAN SANTO:

Junko sat down with Rhines separately to ask about how the new hyper-scale companies like Google and Amazon are creating fundamental changes in the semiconductor industry.

JUNKO YOSHIDA:

Now that new players are coming to the market, new players in Silicon-- we're talking about Facebook, Google, Microsoft, Apple, Tesla, all those. You had a slide in your presentation. So what is the impact of these new commerce to the market? What is the impact on the EDA business? Can you summarize? What are you seeing?

WALLY RHINES:

The first thing is, it's a big financial opportunity for EDA, because these companies have lots of resources, they tend to be very well funded, and so they grow the EDA market for existing tools substantially. But they also bring other opportunities. They have, in many cases, different priorities.

I don't know if you remember the presentation on the Google contact lens that was at DAC five years ago...

JUNKO YOSHIDA:

Right! Yes, yes.

WALLY RHINES:

Now why didn't Google just have somebody else design the chip that went into the contact lens? I have to conclude it's because Google doesn't want to get into the chip business. They want to own the information. And they don't want to make that chip available to other people, they want to own the system: the contact lens, the relationship with the doctor, the program on the cell phone to control the insulin pump. And so a lot of the IoT applications I see, whoever is developing the silicon plans to make their money from the information, not from the chip.

JUNKO YOSHIDA:

Selling cheap chips in volume. That's not the model.

WALLY RHINES:

Right. It's a different motivation, and so it brings people into design that wouldn't normally do design themselves. And so it adds to the design community.

And then there is this massive commitment to electric cars and autonomous driving that is stimulating all sorts of creativity by systems people. And systems people tend to have different priorities. They want to know how the chip will work in the system. And that's what Tony Hemmelgarn was talking about. He talked about the pave system that Mentor has, and I'm sure there will be many alternatives, but fundamentally the ability to do a simulation or emulation of a chip operating in a more complex environment, stimulated by software. So in that case, they have this prescan software done by a company called Tass, creates a simulated output of the sensors in your car, and that input goes into the emulator, which has a model of your chip, which processes the sensor information, and then talks to these other simulation models which are in what's called AIM-SIM, that can be transmission, brakes, steering, and sends all the signals. And then you're able to put scenarios in. Thousands of scenarios. In fact they have prepackaged scenarios for driving the car around, and if you run into a telephone pole or whatever and you can see how your system behaves.

Different priority. But back to your original question, the largest single impact is dramatically expanding the number of companies and people doing design of chips and even printed circuit boards.

BRIAN SANTO:

We close with a few bits of high-tech history, events that happened in the first week of June years ago.

In 1892, Thomas Edison received US patents for a “System of Electric Lighting,” an "Incandescent Electric Lamp,” and other elements of his direct current electrification system.

In 1977, the first personal computer, the Apple II, went on sale. It was based on the cheapest 8-bit microprocessor that Steve Jobs and Steve Wazniak could find, the venerable 6502 from MOS Technology, which ran at a pretty darn fast 1 MHz.

In 1980, the first U.S. government solar power plant was dedicated. Built in Utah, it was at the time the world's largest, with an array of over 250,000 solar cells that could generate up to 50 kilowatts of power.

In 1983, the movie "WarGames" was released. I still get chills when I hear:

AUDIO CLIP: ShallWePlayAGame?

BRIAN SANTO:

And that was your Weekly Briefing for the week ending June 7th. I’m Brian Santo. Catch us here next week at EETimes On Air.

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