Last years IPOs – where are they now?

By Rachel Robinson
WaferNews Associate Editor

It seems that the semiconductor IPO well has begun to run dry, at least for the time being. It has been months since a chip-related company has filed for its initial public offering. And yet, if one looks at companies that went IPO during late 2000 into 2001, it seems that the public market has been kind to them.

Magma Design Automation, Cupertino, CA, went IPO on Nov. 19, 2001 with an initial offering of 4.85 million shares at a price of $13. Magma’s software enables chip designers to reduce the time required to design and produce ICs. The company utilizes FixedTiming methodology and single data model architecture to reduce the timing-closure iterations that are required between the logic and physical processes in IC design flows.

According to Magma Chairman and CEO Rajeev Madhavan, the company’s customers include 20 to 30% of vendors that run at 0.13-micron.

In its latest quarterly report, Magma posted a net loss of $16 million, on sales of $13.9 million. But, Madhavan has his eyes on the future. “We have an opportunity,” he said. “EDA’s are going through an interesting time. [They are] about to come into our territory.”

For Magma, going IPO had a hidden benefit. According to Madhavan, going IPO “dispelled myths” that were created by Magma’s competitors. Madhavan told WaferNews that its competitors were spreading rumors that the company was going out of business. He said that Magma’s IPO “created certainty” about the company’s status.

Additionally, Madhavan said that being a public company “puts [forward] quantifiable numbers, which make mergers and acquisitions easier.” However, he declined to comment on any future deals for Magma.

Timing proved to be a major benefit for another company that went IPO in 2001. Nassda Corp., Santa Clara, CA, went IPO on Dec. 12, with an initial offering of five million shares at $11 each. But, its IPO launch was later than first anticipated. Nassda postponed its IPO the first time, and according to CEO and Chairman Sang Wang, the timing ended up being perfect. “When we went in December, there was a market uplift,” he said. “We caught that momentum, and created good initial success.”

Nassda is a provider of full-chip circuit verification software for nanometer-scale semiconductors. “We’d like to become a strong nanometer solution company that helps worldwide users to be able to design, verify, and optimize their large circuits,” he told WaferNews.

For its first fiscal quarter of 2002, Nassda earned $1 million on $7.1 million of sales. Wang said that 17 out of the top 20 chip-related companies are users of Nassda’s products. And he hopes that is just the beginning. “We just need to continuously expand our solution and product features, and to continue to support our users,” Wang commented. “Eventually, the traditional digital tools will not be adequate. People need to handle big circuits and have a reasonable turnaround.” According to Wang, that’s Nassda’s niche.

ChipPAC, Fremont, CA, went IPO on Aug. 14, 2000 under different circumstances. “When we went public, we made money, and had 7,000 employees. It’s different in that we were a large scale global enterprise, in contrast to a typical VC backed company,” said Robert Krakauer, CFO of ChipPAC.

ChipPAC offered 10 million shares at $12 each.

For ChipPAC, being a public company wasn’t very different than being privately held. “We run this company with a long term vision of a focused operational approach and a financial approach,” Krakauer told WaferNews. “How we run on a private and public basis is the same. We now have public shareholders that have joined the ranks of private shareholders.”

ChipPAC is a provider of semiconductor packaging design, assembly, test, and distribution services. And according to Krakauer, ChipPAC “used to be a fast follower, but now [it’s a] technology leader.”

For 4Q01, the company reported a net loss of $60.1 million on sales of $76.8 million. But the numbers are not the only gauge of success. “We’ve met or exceeded street guidance every quarter in 2001,” Krakauer said.

In terms of technology, Krakauer said that the company has a broad portfolio of packaging, and it has strong market share in wafer thinning, system in a package, and die stacking. The CFO said that the company’s key customers include Intel, LSI Logic, IBM, Atmel, and Fairchild, among others.



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