January 29, 2002

1
Moshe Gavrielov, CEO

January 29, 2002
2
An OutsidersPerspective
3
1998 Wall Street Common Wisdom

• EDA is a small business
• EDA will become a duopoly
• No more EDA companies will go public
• No one invests in EDA startups
• In-house tools will make a comeback
• Confusing business models

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So .What Happened?
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Top IPO Performers 2001
1
8
0
1
6
0
1
4
0
1
2
0
1
0
0
()
8
0
6
0
4
0
2
0
0
Unilab
Bunge
Verisity
Centene
Nassda
Accenture
Select Medical
Cross Country
Given Imaging
LogicVision
AFC Enterprises
Advisory Board
PDF Solutions
Charter Financial
Peet's Coffee Tea
Odyssey Healthcare
HPL Technologies
Wright Medical Group
Willis Group Holdings
Alliance Data Systems
AMN Healthcare Services
Fisher Paykel Healthcare Corp
Magma Design Automation
Monolithic System Technology
United Surgical Partners International
Source CommScan, Equidesk Data includes top 25
performing IPOs YTD Prices as of Dec 31, 2001
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So .What Has Changed?
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2002 Wall Street Common Wisdom

• EDA is a small business
• EDA will become a duopoly
• No more EDA companies will go public
• No one invests in EDA startups
• In-house tools will make a comeback
• Confusing business models

Compared to what?
By whom?
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What Actually Changed in Four Years?

• Complexity up 8X
• Power dissipation up gt2X
• Supply voltage drops
• Very deep sub-micron effects prevail
• Opportunities multiply.

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Key Ingredients for Enduring Success

• Real solution for killer problem
• Large potential customer base
• Effective channels
• Renewable revenue model
• Full management team
• Focus on execution