A Market In Need Of Management

Through its acquisition of Synchronicity, MatrixOne looks to bring its life-cycle-management software to the semiconductor industry
Synchronicity will be compatible with Matrix 10.5, says Mark O'Connell, MatrixOne's president and CEO.

Synchronicity will be compatible with Matrix 10.5, O'Connell says.
MatrixOne Inc. last week steadied its focus on the semiconductor market with a definitive agreement to acquire Synchronicity Software Inc. for $18 million in cash and stock. The deal, scheduled to close in August, gives the product-life-cycle-management company about 120 customers in the semiconductor and high-tech markets, including Fujitsu, Hitachi, Motorola, NEC, Nortel Networks, Qualcomm, and Toshiba.

Synchronicity reported $12 million in revenue last year, with 60% garnered from software-license revenue and the remainder from service and maintenance. MatrixOne will integrate product features of Synchronicity's platform, including its ability to manage large data structures and files, into Matrix 11, slated for release within the next year. The new software will let MatrixOne customers take advantage of the large-file management and transport technology designed into Synchronicity. "We won't eliminate the Synchronicity platform, consolidate the company, or bleed them to death," says Mark O'Connell, MatrixOne's president and CEO. "For now, we'll make the software compatible with Matrix 10.5," released earlier this year.

Shorter product-design cycles, outsourcing, greater collaboration, and complex processes are leading the semiconductor industry toward product-life-cycle management as a strategic tool. Worldwide semiconductor revenue is forecast to reach $214 billion this year, up from $166.4 billion in 2003, according to the Semiconductor Industry Association. And as the industry rebounds from a nearly three-year hiatus following the worst downturn in its history, demand for increased efficiencies afforded by PLM tools will rise.

Engineers will increasingly need PLM to augment electronic design-automation tools used by companies that create components for cellular phones, PDAs, computers, refrigerators, and more. To address the Asia-Pacific market, where many components are manufactured, MatrixOne will leverage existing alliances with companies such as IBM, which resells MatrixOne's PLM software in Japan.

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