In-depth丨Two EDA leaders, are they interested in bidding for Altair?
Focus: artificial intelligence, chips and other industries
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In recent years, Altair has gradually stood out in the EDA market with its technological advantages in simulation optimization, high-performance computing and cloud computing.
Despite this, Altair still has gaps in some aspects compared with the three leading companies in the EDA industry: Cadence, Siemens EDA under Siemens, and Synopsys.
To close this gap, Altair has implemented an aggressive acquisition strategy designed to rapidly supplement its organic growth through M&A and broadly diversify its portfolio.
On the one hand, Altair has achieved remarkable results through its acquisition strategy and is expected to continue to achieve rapid growth through mergers and acquisitions in the future.
On the other hand, with the continued evolution of the EDA market and the continuous innovation of technology, Altair may also become the target of other companies and a hot candidate for mergers and acquisitions.
Following recent news that PTC and Cadence are interested in bidding for Altair Engineering, Siemens AG is currently in talks to potentially acquire Altair Engineering.
If the relevant rumors are true, after Synopsys acquired Ansys, the two giants in the EDA field seem to be about to start a new round of competition.
Altair Engineering Inc. is an information technology company headquartered in Troy, Michigan, United States. It was co-founded in 1985 by James R. Scapa, George Christ and Mark Kistner.
The company focuses on providing software and cloud solutions for simulation, IoT, high performance computing (HPC), data analytics and AI.
As Altair claims, the company is a leading provider of design and simulation software that helps customers improve product performance, shorten development cycles and reduce costs.
According to the financial report, Altair's total revenue reached US$612.7 million in fiscal 2023, an increase from US$572.2 million in 2022.
Among them, software product revenue was US$550 million, which was also an increase from US$506.5 million in 2022.
As of now, Altair's stock price has increased by 27%, with a market value of US$9.1 billion.
Advances in HPC and Cloud Technologies Strengthen Altair's Position
It is an indisputable fact that the demand for advanced simulation capabilities in electronic design and product development continues to grow.
It is known that automobile and aerospace are the two fields with the greatest demand for simulation and analysis.
Relevant data shows that the automotive and transportation industries are the largest users and investors of CAE solutions.
Total investment in this area will reach $2.5 billion in 2022;
Next is the aerospace and defense industry, with an investment of $2 billion;
The electronics and high-tech industry ranked third with an investment of nearly US$1.5 billion.
Simulation-driven design has become an increasingly important and common element of product lifecycle management (PLM) and product development efforts, largely related to the trend toward digitalization, with digital prototypes becoming more common.
Additionally, advances in HPC and cloud technologies are creating more room for systems and advanced simulations, and more efficiently processing exponentially growing amounts of data.
This will certainly help solidify Altair’s position at the convergence point of simulation, HPC, and AI.
Altair's product line can be divided into four major areas: design stage solutions, HyperWorks solutions, electromagnetic and electronic solutions, and data analysis and machine learning.
Altair's semiconductor design solutions are focused on optimizing the EDA design process, improving design-to-manufacturing transitions, reducing iterations and accelerating time to market.
Altair provides a range of tools for semiconductor reference (PCB) design, embedded system development, silicon debug/semiconductor debug, and smart product realization to meet the challenges of growing performance demands and product complexity.
Additionally, Altair’s solutions enable simulation of normal use or misuse scenarios of structure, thermal, fluid properties, vibrations, and restraints in a single multi-physics environment, ensuring product reliability and safety.
IC design verification licensing is expensive and often requires hundreds to thousands of license seats to perform single-chip simulation.
Cloud-based business models promise to make high-quality EDA tools more affordable and accessible.
Additionally, these EDA tools typically run on desktop computers and are not natively cloud-enabled or compatible with cloud environments.
Altair has integrated its own silicon debugging tools with Metrics’ digital simulator DSim to provide simulation and debugging capabilities, which can be deployed as a desktop application or on the company’s servers or in the cloud.
Digital tools play a key role in future manufacturing
Siemens has accumulated profound technical strength in many fields such as industrial automation, energy management, and transportation, and has established an extensive customer network.
However, with the advent of the digital age, the role of software in the industrial field has become increasingly important.
For a company like Siemens, which has long been involved in heavy equipment and hardware, the move toward acquiring a strong software portfolio is a natural adaptation to the ongoing digitalization of manufacturing.
Under Chief Executive Roland Busch, Siemens is winding down its heavy equipment business to focus on higher-margin software-driven product lines.
The acquisition could be a sound strategic fit for Siemens EDI Software and is feasible within the group’s current financial capabilities.
The software business, as an important part of Xcelerator's revenue, is currently showing an upward trend.
As a leading industrial company, Siemens has not only spun off and listed its medical and energy businesses, but is also seeking to sell its lower-yielding business segments.
In addition, through a series of large-scale acquisitions, Siemens has brought a number of industrial software companies including UGS, Innotec, LMS, CD-Adapco, Camstar, and Mentor under its umbrella.
With the help of these technologies, Siemens is expected to further enhance its data processing and analysis capabilities in the fields of industrial Internet of Things, smart manufacturing, etc., thereby achieving more intelligent production and management.
Through in-depth analysis and mining of massive production data, the company is able to optimize production processes, predict equipment failures, and improve production efficiency and product quality.
In the context of an industry where simulation and data-driven decision making are becoming increasingly important, the acquisition of Altair may reflect the strategic intentions of Synopsys and Ansys.
That is, by expanding software capabilities to stimulate growth potential and explore new application scenarios, such as 3D printing technology for advanced packaging.
Siemens’ interest in Altair, which uses Ansys for additive manufacturing simulation, reflects a broader trend of industry consolidation aimed at redefining the future of advanced manufacturing.
If the deal goes through, it will not only strengthen Siemens’ position in automation, but also its influence in AM, where integrated software solutions are key to unlocking full production capabilities.
Ending:
As software becomes increasingly central to the adoption of additive manufacturing ( AM) technology, exemplified by AI-driven software company 1000 Kelvin, these acquisitions highlight a growing recognition of the critical role digital tools will play in shaping the future of manufacturing.
As the industry continues to watch these developments unfold, it’s clear that software is no longer a marginal player in 3D printing technology, but is becoming a major driver of growth and integration into traditional manufacturing processes.
Some references: Semiconductor Industry Insights: "Two EDA giants, bidding for Altair?", Kun Shao said: "Why did Altair become the last player who dared to challenge Ansys?", Automation and Engineering Technology: "Siemens bids for Altair, the largest acquisition in history is about to be born", Smart Manufacturing Home: "Siemens bids for industrial software giant Altair, or more than 10 billion US dollars"
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