SANTA CLARA, Calif.--(Indus Business Journal)--April 01, 2004-- For Vic Kulkarni and Sequence Design Inc., a little is a lot. Semiconductor companies use Sequence's software to design the smallest of chips and save big bucks in doing so.

The Santa Clara-based Sequence specializes in software for nanometer design, which is for chips that are 200 times smaller the width of a human hair. Still, despite these chips' diminutive stature they are extremely complex and extremely expensive. One such chip might contain 125 million transistors and millions of wires connecting them, said Kulkarni, Sequence's president and chief executive officer.

Building a prototype of one chip might cost a company $25 million, he added.
If a mistake is made in this process, the company is out a lot of time and money."It is a very expensive proposition," said Kulkarni. "One small error and the chip doesn't work."

According to Kulkarni, semiconductor companies are looking to take a chip that cost $25 million to make and generate about $125 million in six to eight months on the market. Delays and mistakes in the manufacturing process drastically cut that end profit number.

This is why companies are willing to pay big bucks for software that ensures no mistakes are made in the chip-design process. Sequence has several software products and licensing fees range from $100,000 per license to $300,000 per license. The company's list of customers is enough to suggest that a good amount of chipmakers believe Sequence's software will limit their mistakes. Sequence has about 125 customers. These include big names such as Ericsson, Fujitsu, IBM, Motorola Inc., NEC Corp., Sony Corp., Toshiba and Samsung.

"People are willing to pay if we solve their mission-critical processes," said Kulkarni. Sequence expects to earn about $15 million this year.
And Sequence has some concrete examples of how it saved customers money.
Using Sequence's software, Cisco Systems Inc. was able to cut down the manufacturing process on a chip from four months to three weeks, saving millions of dollars a month, according to Kulkarni.

Another customer used Sequence's software to save $1 per chip it made, he added - a substantial amount when most chip orders are in the tens of millions.
These kinds of savings are the only things that allow Sequence to compete with larger companies who often increase their appeal by offering deals on licensing fees, which Sequence can't, said Kulkarni.

Sequence has also looked to attend to the increasing demand of its customers and save costs by opening up a support and research-and-development center in New Delhi, India. Sequence's India operations were launched eight months ago; just over 20 of the company's 75 employees are in India.

Kulkarni pointed out that its center in India is more than just a back-end operation."We are finding some really good research-and-development people," that are contributing cutting-edge work, he said.

Sequence also has offices in Japan that work with the company's big Asian clients like NEC, Toshiba, Sony and Samsung. The Asian office has been extremely successful for the company and generates about $7 million in revenues.

Kulkarni expects Sequence to continue to grow in the coming year. Recently the company had four more patents approved - it now has a total of 18.
He also sees potential for acquisition.

"A company like us is attractive to other big companies and we always keep the door open," he said. "If there is a good offer for our stock holders, executives and employees we will consider it."
Sequence was formed by the merger of Frequency Technology and Sente Inc. in June 2000. In January 2001, Sequence merged with Sapphire Design Automation.
Kulkarni was with Frequency before the merger with Sente and the formation of Sequence. He became CEO of Sequence in May 2002. Prior to that he served as the company's chief operating officer. His background is in semiconductors.
He graduated from the Indian Institute of Technology in Bombay with a bachelor's degree in electrical engineering and came to the United States in 1974. He studied at the University of Cincinnati and received a master's degree in solid-state electronics. In 1977, he moved to Silicon Valley and work with National Semiconductor Corp. He was on the design team that made the first chips for cars - in the Cadillac. He worked for other semiconductor companies such as VLSI. Kulkarni eventually joined Meta-Software, helping take the company public in 1995. Prior to joining Frequency, he was general manager and vice president of Avant's silicon business unit. Avant bought Meta for $160 million in the late 1990s.

About Sequence

Sequence Design, Inc. enables system-on-chip designers to bring higher-performance and lower-power integrated circuits quickly to fabrication. Sequence's power and signal integrity software give its more than 100 customers the competitive advantage they need to excel in aggressive technology markets, despite demanding complexity and time-to-market issues of nanometer design.

Sequence has worldwide development and field service operations. The company was recently named by Reed Electronics as one of the top 50 companies to watch in the electronics industry. Sequence is privately held. Sequence is a member of Cadence Design Systems' Connections^(TM) and Mentor Graphics' Open Door^(TM) partnership programs. Additional information is available at sequencedesign.com.