KJ2201X1-JA1 On December 23, according to Reuters, the Wall Street Journal and others, citing sources familiar with the matter, global electronic design automation (EDA) and silicon IP giant Synopsys has submitted an offer to acquire Ansys, an engineering software supplier with a market value of $30 billion. The acquisition, if successful, would not only create a new design software giant, but would also be one of the first major mergers and acquisitions in the semiconductor industry in 2024.

KJ2201X1-JA1 The deal talks come as Synopsys co-founder Aart de Geus prepares to transition into the role of executive chairman and transfer CEO powers to Chief Operating Officer Sassine Ghazi on January 1, 2024.

Ansys and Synopsys formed a partnership in 2017 to integrate each other’s technologies, with the goal of helping the two companies’ overlapping customers use their products more effectively. Synopsys’ pursuit of transformative acquisitions amid leadership changes underscores the commercial appeal of Ansys software, which is widely used in design, including rackets for high-profile players in tennis.

Synopsys is one of the companies that has been in talks with Ansys about a potential deal, and Ansys has attracted other suitors, but there is no certainty that Synopsys’ bid will win, the sources said.

KJ2201X1-JA1 Mergers between giants and giants

Synopsys is based in Sunnyvale, California, and has a market capitalization of $85 billion. Synopsys has gained more than 70 percent this year as investors have piled into AI-related stocks.

In terms of market position, the EDA market share of Sinesco Technology jumped from 41.2% in 2021 to 45.8% in 2022. In addition to the continuous evolution of products and technologies, DSO.ai (bringing AI into the design process to find the best potential solutions) was also adopted by ST Semiconductor (STM) and SK Hynix, further consolidating its position as the leader. In addition, Synovate ranked second in the world in IP market share (about 20% in 2022), second only to Arm (about 41% in 2022), but ranked first in interface IP, memory IP, analog IP and physical IP.

KJ2201X1-JA1 Ansys, founded in 1970, is a simulation software manufacturer headquartered in Canonsburg, Pennsylvania. Its main business is developing simulation software that helps predict how products will behave in real life, and it is also the world’s largest maker of computer-aided engineering (CAE) software.

CAE software is mainly used for simulation analysis, which is essentially a computer program solidified by algebraic solution process obtained after mathematical treatment of theoretical models of physics and engineering disciplines, and includes rich engineering data, models, simple and easy to operate user interface and result analysis functions. As a comprehensive, knowledge-intensive information product, CAE integrates algorithms and technologies of physics, mathematics, engineering, computer science and other disciplines, involving a wide range of disciplines and KJ2201X1-JA1 complex models, requiring a deep theoretical foundation and continuous technological innovation.

According to the Ansys website, engineers use its structural analysis software before a project starts to reduce manufacturing costs, reduce risk and get products to market faster. Its software is used by companies in the aerospace, automotive and industrial industries.

In terms of EDA market position, Ansys is second only to the first echelon of the big three

According to the financial report, Ansys achieved a total operating revenue of 2.066 billion US dollars in fiscal year 2022, an increase of 8.33%, and a net profit of 524 million US dollars, an increase of 15.20%. The compound growth rate of the company’s total revenue and net profit from 2013 to 2022 was 10.21% and 8.81% respectively. In the first three quarters of 2023, the company achieved total revenue of 1.465 billion US dollars, an increase of 6.81% over the same period last year, and the company’s overall business maintained a stable growth trend.

Ansys shares are up nearly 40% this year and it now has a market value of nearly $30 billion. But the sources said Ansys received an offer well above $400 per share, and a deal could be announced in the coming weeks if negotiations go well.

KJ2201X1-JA1 In response to the rumors, an Ansys spokesperson said in an emailed statement: “M&A rumors are not unusual in our industry, and it is our longstanding policy not to comment on these rumors.”

The history of EDA is the history of mergers and acquisitions

The history of EDA industry is a history of mergers and acquisitions, just by the “big Three” initiated an astonishing 200 mergers and acquisitions, of which the number of mergers and acquisitions by Synopsys, up to 80; Cadence and Siemens EDA are 62 and 66 (as of 2022), respectively.

In the history of Ansys, there have been as many as 28 mergers and acquisitions (figure below). In 2006, the company acquired Fluent, a leader in the field of fluid simulation, and in 2008, the company acquired Ansoft, a leader in the field of circuit and electromagnetic simulation. Through these key integrations,KJ2201X1-JA1  Ansys has become the world’s largest simulation software company.

The entire Ansys product line includes the Structural Analysis (ANSYS Mechanical) series, the Fluid dynamics (ANSYS CFD FLUENT/CFX) series, the Electronic design (ANSYS ANSOFT) series, as well as ANSYS Workbench and EKM. Products are widely used in aviation, aerospace, electronics, vehicles, ships, transportation, communications, construction, electronics, medical, national defense, petroleum, chemical and other industries.

Ansys’s large General Finite Element Analysis (FEA) software is the fastest growing computer Aided engineering software in the world. It can interface with most computer Aided design (CAD, computer Aided design) software to realize data sharing and exchange. Such as Creo, NASTRAN, Algor, I-DEAS, AutoCAD and so on. It is a large general finite element analysis software integrating structure, fluid, electric field, magnetic field and sound field analysis. It is widely used in nuclear industry, railway, petrochemical, aerospace, machinery manufacturing, energy, automobile transportation, national defense, electronics, civil engineering, shipbuilding, biomedicine, light industry, mining, water conservancy, household appliances and other fields.

It is reported that ANSYS software is powerful, simple and convenient to operate, and has become the most popular finite element analysis software in the world, ranking first in the FEA evaluation over the years. More than 100 scientific and technological institutions in China use ANSYS software for finite element analysis or as standard teaching software.

This is the second recent acquisition by Sinsi

In addition to Ansys, Synopsys recently acquired Imperas software. As you can see below, Imperas software announced the news on the company’s linkedin. Given Imperas software’s area of expertise, we can see this acquisition as another bet Synopsys is making on RISC-V.

Imperas, based in the United Kingdom, is a virtual software simulation company that has expanded into RISC-V. In November 2018, the company released riscvOVPsim, a free RISC-V instruction set simulator that allows engineers to model and simulate single-core RISC-V cpus. The simulator is aimed at hardware and software engineers and can be used as an entry point for kickstart software development, eliminating the need for hardware at hand and hardware-side build and conformance testing. According to Imperas, riscvOVPsim can execute more than 1 billion instructions per second on a standard Windows or Linux PC. It also has configurable run-time Settings that apply to all RISC-V specification options to make it easy to compare run-time results with RTL implementations.

Earlier this year, Synopsys joined the RISC-V camp, showing off three processor designs it added to the ARC portfolio for a range of embedded applications. The company, perhaps best known as a provider of electronic design automation (EDA) tools, has extended its existing ARC family of embedded processor designs with 32-bit and 64-bit ARC-V options based on the RISC-V open instruction set architecture.

As for the new three series are ARC-V RMX, 32-bit ultra-low power embedded core; ARC-V RHX, a 32-bit core optimized for real-time performance; ARC-V RPX, a 64-bit multi-core processor optimized for host applications that typically run on Linux.

Synopsys said it decided to enter the RISC-V space due to the growing popularity of open standards and customer interest.