For the Electronic Design Automation (EDA) industry, mergers and acquisitions (M&A) seem to be the most common dynamics within the sector. Some even jest that EDA companies are either in the process of M&A or on the hunt for acquisition targets. Even during the semiconductor downturn, there is a plethora of news about EDA M&A, and the industry's three giants—Synopsys, Siemens, and Cadence—are built upon countless acquisitions.

Especially in the mid-to-late 1990s, with the rapid development of chip technology and the application of high-level language descriptions, Electronic System-Level Design Automation (ESDA) gradually became mainstream, triggering a series of mergers and acquisitions. The structure of the three giants gradually took shape, and in the nearly thirty years since then, they have directly participated in more than 200 M&A deals, averaging more than 70 acquisitions per company. It is the relentless M&A that has given rise to the EDA market that continues to thrive today.

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Recently, while Synopsys' acquisition of Ansys is still pending, Cadence took the lead in acquiring Invecas. Below, we will take an incomplete inventory of the 2023 acquisition history of the EDA giants. Since all analysis is based on the author's perspective and does not represent the entirety of the facts, we hope for your understanding and suggestions, thank you.

Synopsys

Let's start with Synopsys. In 1986, Dr. Aart de Geus from the GE Microelectronics Center founded Optimal Solutions, dedicated to developing Synthesis software with automatic logic synthesis capabilities. The following year, the company was renamed Synopsys and officially embarked on the path of EDA development.

In the decades-long history of Synopsys, M&A has long been its most formidable secret weapon: In 1990, it acquired Zycad's VHDL simulation business and launched test synthesis products; in 1995, it acquired Silicon Architects, which participated in the development of next-generation gate array technology (basic cell array); in 1997, it acquired Epic Design Technology, which focused on deep sub-micron analysis, and Viewlogic Systems, which developed advanced simulation products; in 2002, it acquired Avant, which ended a patent lawsuit with Cadence, becoming the first leading EDA tool supplier capable of providing top-notch front-end and back-end complete IC design solutions; in 2008, it acquired Synplicity, a leader in FPGA implementation and debugging, entering the FPGA market...

In just the past 2023, Synopsys has completed four acquisitions, which makes people marvel at its strength.

Firstly, at the end of last year, it acquired Imperas, a leading British provider of RISC-V processor models, RISC-V verification solutions, and software simulation virtual prototypes. The specific amount was not disclosed. After the acquisition, Synopsys further expanded its RISC-V verification and verification solutions.According to the data, in November 2018, Impera 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 without the need for hardware at hand and hardware-side build and consistency 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 runtime settings for all RISC-V specification options to facilitate comparison of runtime results with RTL implementations. In February 2023, Imperas Software Ltd announced a collaboration with Synopsys, Inc. to meet the growing demand for RISC-V processor verification. The collaboration enables mutual customers to use ImperasDV verification solutions and Synopsys' industry-leading VCS simulation and Verdi debugging tools to simplify their RISC-V verification tasks, thereby improving efficiency and achieving critical time to market and quality goals. ImperasDV is the first commercial verification IP for RISC-V processors, including an architecture verification test suite, which is very important for RISC-V developers to ensure that hardware implementations meet the expectations of the software ecosystem supporting RISC-V. It natively supports the open standard RISC V Verification Interface (RVVI) and uses the "lock-step comparison" co-simulation method for comprehensive processor verification, including asynchronous events and debugging operations. Then there is PikeTec, which Synopsys announced its acquisition in August. It is a German-based automotive control unit software testing and verification solution provider. According to data, PikeTec was previously affiliated with private equity firm ECM Equity Capital Management. It was founded in 2007 and mainly engaged in the testing and verification of automotive control unit software. Its valuation exceeds US$200 million. According to official statements, PikeTec test automation tools can perform intuitive and flexible testing in all stages of development and simulation environments, from model-in-the-loop (MiL) to vehicle-in-the-loop (ViL). As software volume and complexity increase, it is pushing testing of automotive software to earlier stages of product development, using models, software, and processors in virtual environments. Synopsys’ leading Software-in-the-Loop (SiL) and virtual hardware solutions combined with PikeTec’s test automation tools and services provide automotive companies with a powerful solution to bring SDVs to market faster, safer, and more securely. “Many automotive OEMs have adopted PikeTec’s software testing and validation solutions to address the increasing software content and complexity in the shift to software-defined vehicles,” said Ravi Subramanian, general manager of Synopsys’ System Design Division. “Combining the expertise of Synopsys and PikeTec will enable us to bring innovative virtualization and testing solutions to market that directly address the challenges our customers face as they shift left in software development and validation.” The two companies mentioned above belong to the verification and prototyping space, and in the chip design space, Synopsys in 2023 is also casting a wide net. First is Maxeda, a newly-founded EDA company from Taiwan. There was no press release or specific statement for this acquisition. The low-key Maxeda just quietly changed the company's official website to a dark purple banner of its new owner. According to data, Maxeda, founded in 2015, focuses on EDA, providing floorplanning automation, placement optimization, customized placement solutions and professional services for integrated circuit physical design. The core technologies include mixed-size circuit placement, data flow analysis, floorplanning technology, and exploratory algorithms to provide high-performance circuit design automation functions. Last September, Maxeda announced a partnership with international IC design giants to provide a number of AI-assisted EDA solutions that have been verified by mass production - MaxPlace RL Reward Platform. The platform has overcome the limitations of machine resources and computing time through 100 times faster placement speed and highly relevant rewards in actual mass production verification. It proves that the layout results produced by reinforcement learning are significantly better than the original reference design process, effectively optimizing the performance of the chip and significantly reducing the time required for physical design from several months to several days. It is worth mentioning that after obtaining his doctorate, Zhida CEO Chen Dongjie joined SpringSoft, an EDA company in Taiwan, China. After SpringSoft was acquired by Synopsys in 2012, he chose to leave and start his own business. Now that Zhida has been acquired again, it is his second time to become an employee of Synopsys. In addition to Zhida, Synopsys also acquired Silicon Frontline in California, USA in May last year. It specializes in providing relevant simulation EDA software for manufacturing and testing chips. Its main advantage lies in the prevention technology of semiconductor electrostatic discharge (ESD). It is currently the only company in the industry that can provide full-chip transient HBM and CDM ESD analysis solutions. 12 of the top 25 semiconductor companies in the world are using Silicon Frontline's products and technologies.Synopsys states that Silicon Frontline Technology offers a unique electrical layout verification solution that addresses the critical yet challenging performance and reliability issues in today's complex electronic designs. Its solutions can detect "blind spots" in the design of large power semiconductor devices and electrostatic discharge (ESD) protection networks, helping developers to accurately optimize and verify early in the development process, ensuring a successful tape-out on the first attempt. Design teams can quickly and accurately perform resistance, capacitance, thermal, and ESD verification before and after layout, which greatly benefits the design work. Silicon Frontline's products have become the de facto standard in power devices, as well as in mixed-signal and analog designs, helping developers to improve efficiency and ensure the robustness of the design.

With the acquisition of Silicon Frontline, Synopsys has expanded the capabilities of its design analysis product portfolio, building a system-level electrical analysis platform and obtaining a robust framework that supports the design migration of the core engine, which can be used for system-level sign-off analysis of 3DIC, thermal management, and electromigration.

Of course, compared to another major acquisition, the above four acquisitions have become appetizers. At the end of last year, news broke that Synopsys intended to acquire the simulation software giant Ansys at a price of about $400 per share, with a total value of $35 billion.

Information shows that Ansys, founded in 1970, is a simulation software manufacturer headquartered in Pennsylvania, USA. Its main business is to develop simulation software that can help predict how products will perform in real life, and it is also the world's largest computer-aided engineering (CAE) software manufacturer.

The two companies have always maintained a close relationship in the past. In 2017, Synopsys and Ansys announced the establishment of a partnership to integrate Ansys's technology with some of Synopsys's technology. This was to help customers of the two overlapping companies to use their products more effectively. In June of this year, Ansys and Synopsys announced the launch of a new reference process for the design of radio frequency integrated circuits (RFIC), which was jointly developed with Samsung Foundry for its 14LPU process technology. This reference process helps to ensure that joint customers use Ansys's golden sign-off electromagnetic analysis and Synopsys's comprehensive analog/RF and mixed-signal design and verification solutions to optimize RFIC design.

An interesting point is that Ansys's history also includes as many as 28 mergers and acquisitions. It acquired the leading US Fluent company in the field of fluid simulation in 2006, and the leading US Ansoft company in the field of circuit and electromagnetic simulation in 2008. Through these key integrations, Ansys has become the world's largest simulation software company.

At present, negotiations for this major acquisition are still ongoing, and there are many uncertainties. Synopsys may not necessarily get what it wants, but what can be determined is that once this acquisition is reached, it will bring huge business opportunities and strategic value to both parties, and can further promote the integration and development of the semiconductor industry.

Cadence

Compared with Synopsys, Cadence is also a key leader in the field of electronic design. Through mergers and acquisitions, it has gradually achieved an extension from analog IC to digital IC, chip design to PCB and IP business. On June 1, 1988, the earliest two software EDA companies - ECAD Systems and SDA Systems - merged, announcing the birth of Cadence. The merger freed them from the constraints of small EDA startups, and they have been soaring ever since.

The history of Cadence is also written by mergers and acquisitions: In 1989, Cadence acquired Tangent Systems and launched a timing-driven ASIC layout and routing tool, becoming the number one supplier of IC CAD; In 1990, Cadence acquired Gateway Design Automation, introduced the Verilog language into the public application field, and promoted the transformation from schematic design to hardware description language; In 1999, the company acquired OrCAD, harvested the largest customer base of PCB design software and services, and began to enter the PCB field; From 2001 to 2002, Cadence completed a series of strategic acquisitions of IC design technologies, including CadMOS crosstalk noise analysis technology, Silicon Perspective silicon wafer virtual prototyping technology, Plato's NanoRoute technology, and Simplex's signal and power integrity technology...In the just-concluded year of 2023, Cadence completed the acquisition of three companies, namely ARC, Intrinsix, and Pulsic, as well as the acquisition of Rambus PHY IP.

ARC

ARC Group Worldwide, located in Florida, USA, is a precision manufacturer specializing in Metal Injection Molding (MIM) and cleanroom plastic injection molding. Metal Injection Molding (MIM) is a manufacturing process that utilizes injection molding technology, similar to plastic injection technology, but instead of using plastic materials such as polypropylene or polycarbonate, it uses metal/thermoplastic raw materials to manufacture parts with complex geometric shapes, at a cost that is only a fraction of other manufacturing technologies (such as machining, stamping, casting, etc.). This new technology is highly compatible with the internal services currently provided by Cadence and the comprehensive, medical-focused contract manufacturing partner requirements of customers.

"The acquisition of ARC Florida is another significant step in our strategy to become the leading medical technology manufacturing partner for our customers, providing them with a complete solution from early development to scaled production," said Rob Werge, President and CEO of Cadence. "By adding MIM to Cadence's product portfolio, we further expand our vertical manufacturing platform, providing another cost-effective method for the scaled production of products. We look forward to leveraging the company's deep expertise in high-precision metal injection molding of medical devices and combining it with Cadence's full range of capabilities across seven regions worldwide, fully realizing the value created by our unique integrated model."

Intrinsix

Intrinsix Corporation is a wholly-owned subsidiary of Ceva, specializing in wireless connectivity and intelligent sensing technology. It is a design engineering solutions provider focused on the US aerospace and defense industry, offering complex SoC design expertise in the fields of RF, mixed signal, digital, software, secure processor, and heterogeneous SoC interface IP, with more than 1,500 successful designs, and its customer base includes companies such as Intel, IBM, ADI, and Lockheed Martin.

Cadence stated that the acquisition has brought a highly skilled engineering team to Cadence, with expertise in advanced nodes, RF, mixed signal, and secure algorithms, expanding Cadence's system and IC design services team, and expanding Cadence's influence in key high-growth vertical areas, including aerospace and defense.

Pulsic

Headquartered in Bristol, UK, Pulsic is an Electronic Design Automation (EDA) company focused on precision design automation, providing layout planning, layout, and routing software solutions that have been verified for production to address the extreme design challenges of advanced nodes. As a complement to existing design processes, standards, and databases, Pulsic technology provides manual quality faster than manual design or other EDA software solutions. Pulsic has successfully taped out for IDM and fabless customers in the global memory, FPGA, custom digital, LCD, imaging, and AMS markets.

Cadence stated that the addition of Pulsic further strengthens the commitment of Cadence Virtuoso Studio to use AI to facilitate many customers, helping them complete the traditional manual tasks of custom design, and entering new areas of design possibilities through automation and innovation.Rambus PHY IP

In July of last year, Cadence and semiconductor IP provider Rambus announced that they had reached a definitive agreement for Cadence to acquire Rambus's SerDes and memory interface PHY IP business. Rambus will retain its digital IP business, including memory and interface controllers as well as security IP. The anticipated purchase of technology assets will also bring Cadence a verified and experienced PHY engineering team in the United States, India, and Canada, further expanding Cadence's rich talent base in the field.

In January of this year, just after the New Year, Cadence started a new round of acquisitions, announcing the acquisition of Invecas, a provider of design engineering, embedded software, and system-level solutions based in California, USA. Data shows that Invecas has close relationships with major players in the design ecosystem as well as top wafer foundries, assembly, and test partners, with rich experience in chip design and production, and has served hundreds of customers in various vertical fields such as mobile, network, hyperscale, and automotive. In addition to Cadence's EDA solutions, Invecas will also utilize and enhance Cadence's extensive IP portfolio to achieve a more comprehensive custom product solution.

In fact, as early as February 2020, Synopsys also acquired some IP assets of Invecas, and subsequently, Invecas retained its HDMI IP and ASIC design solutions, which are now also fully included in Cadence's portfolio.

Cadence stated that this acquisition has added a team of highly skilled system design engineers to the company, who have the expertise to provide customers with customized solutions across chip design, product engineering, advanced packaging, and embedded software. By acquiring Invecas, Cadence can expand its system design engineering products and support customers in key high-growth vertical industries who need to actively improve performance while dealing with increasing system-level complexity.

Siemens EDA

Unlike the other two companies, Siemens EDA is not a business department originally owned by Siemens. Its predecessor is Mentor Graphics, established in 1981, which is also the earliest established company among the three EDA giants. It initially engaged in computer-aided engineering business and acquired California Automated Design in 1983, launching interactive simulation software MSPICE in the CAE market and began to develop overseas markets, successively establishing branches in the UK, France, West Germany, Japan, and other regions.

Although Mentor Graphics was acquired by Siemens in 2016, it itself was also built on the basis of many acquisitions: In 1984, Mentor acquired another EDA manufacturer in Oregon, Synergy Dataworks; in 1988, Mentor merged CAE business of Tektronix for $5 million; in 1990, Mentor acquired Silicon Compiler Systems; in 2008, Mentor acquired Flomerics PLC for $60 million in cash...

Mentor was once one of the world's largest EDA manufacturers, but with the rapid rise of Cadence and Synopsys, Mentor Graphics' market position was surpassed by the other two giants. However, due to Mentor Graphics' accumulation of many advantages in signoff and DFT (Design For Test), Siemens EDA's related products (such as Calibre) still have certain advantages.

In the past 2023, Siemens EDA did not make frequent acquisitions like Synopsys and Cadence, but only acquired an EDA company established in 2008 - Insight EDA. Data shows that Insight EDA is a pioneer in relying on EDA automation to solve specific design circuit reliability problems, capable of providing efficient circuit reliability analysis using models, discovering design-specific potential circuit reliability fault areas, and assisting in solving related problems, helping engineers achieve one-time tape-out success.Siemens mentioned in its statement that the demand for circuit reliability is growing rapidly in the IC design industry. Siemens' Calibre PERC is committed to building reliability sign-off software that can provide inspection functions that traditional verification tools cannot achieve. The addition of Insight EDA technology will help Siemens provide end-to-end circuit reliability solutions for chip designers.

Michael Buehler-Garcia, Vice President of Product Management for Siemens Digital Industries Software's Calibre Design Solutions, said: "The acquisition of Insight EDA can further improve Siemens' technology roadmap in the field of circuit reliability verification. By adding Insight EDA tools to Siemens' Calibre PERC product line, design engineers can now perform reliability checks and analysis for specific designs more easily."

Mergers and Acquisitions Trends and Impacts

Looking back on 2023, the trend of mergers and acquisitions among EDA companies is intensifying. Everyone generally hopes to enhance chip design automation experience through acquisitions to cope with major design process challenges brought by advanced processes, such as layout, wiring, and testing.

Not only the top three giants, but also those second and third-tier EDA manufacturers have also started to buy, such as Keysight's acquisition of Cliosoft, ANSYS's acquisition of Diakopto, etc. Previously, most mergers and acquisitions were concentrated in the horizontal field. However, with the rise of artificial intelligence and new energy vehicles in recent years, larger companies have also turned their attention to these hot technologies and applications. By entering other fields, they keep themselves up-to-date and ensure their competitiveness.

In addition, system companies are also participating in chip design, and the entire industry is shifting from the "design to sales" model to the "design to use" model. System design and chip design may be merging. Current trends indicate that in the future, from the top to electronic systems and down to silicon processes, we can achieve broader joint optimization. This is the so-called digital twin concept of the new industrial era, and this full-stack optimization may require EDA companies to not only be limited to chip design but also expand to the entire electronic system design.

Just like Samsung, which can integrate what customers need under one roof and provide a complete set of supporting services. From this perspective, it is easier to understand the new idea of acquiring Ansys. After the merger, what is born is not only a giant in the EDA industry but also a new trend that may dominate the future of the EDA industry.

In fact, whether it is domestic or foreign, a new round of EDA mergers and acquisitions has already arrived. As a reader, which company do you favor more?