Chip design software provider Synopsys announced on Tuesday that it will acquire electronic systems simulation and analysis software maker Ansys for $35 billion. The acquisition is expected to meet the increasing market demand for an integrated offering capable of semiconductor design simulation and analysis. Synopsys, a rival to Cadence and Mentor Graphics, makes the software required to design semiconductor chips, while Ansys makes software suites that provide capabilities to run simulations and analysis on electronic systems running on these chips. The two companies have “highly complementary businesses” and significant expansion opportunities, with Synopsys expecting its total addressable market (TAM) to increase by 1.5 times to about $28 billion. The combined TAM is expected to grow at about 11% (CAGR) as the need for the fusion of electronics and physics across industries accelerates. The deal is expected to close in the first half of 2025.
According to Pareekh Jain of Pareekh Consulting, the acquisition has larger implications on the overall engineering software market, which was estimated at $33 billion in 2022 and is expected to grow at about 18.8% CAGR from 2023 to 2030. The deal is significant as it is rare for an electronics design automation (EDA) company to acquire a company to expand into the larger engineering design software market. The deal is unlikely to impact the core chip designing market, but vendors offering design and simulation software in industry sectors, such as automotive, aerospace, and industrial equipment, may feel the pressure to develop full stack design capabilities from chips to whole engineering systems. The deal is also significant as most chipmakers, including Nvidia, AMD, and Intel, along with cloud service providers, such as Microsoft, AWS, Google, and IBM, are looking to develop their own chips to cater to the growing demand for supporting AI and generative AI-related workloads.
The acquisition is expected to achieve approximately $400 million of run-rate cost synergies by year three post-closing and approximately $400 million of run-rate revenue synergies by year four post-closing, growing to more than approximately $1 billion annually in the longer-term. Synopsys’ acquisition of Ansys is expected to have a significant impact on the engineering software market and is a strategic move to expand its capabilities in the semiconductor design and simulation industry.
Source: www.computerworld.com
2024-01-18 06:00:04