Recently, Renesas Electronics announced that it would be 68$5 **Acquisition of all issued by PCB design software company Altium**. Will it be a trend for chip design companies to acquire design software companies upstream?
Recently, Renesas Electronics announced on its official website that Renesas Electronics has signed an acquisition agreement with Altium Limited. Under the terms of the acquisition agreement, Renesas will receive a price of 68The $5 acquisition of all of Altium's issued shares is equivalent to a total equity value of A$9.1 billion (about 42.8 billion). Founded in 1985, Altium is a leading provider of PCB design tools. Upon completion of the acquisition, Altium will become a wholly owned subsidiary of Renesas.
Commenting on the acquisition, Hidetoshi Shibata, CEO of Renesas Electronics, said, "The addition of Altium will enable us to provide an integrated, open platform that makes it easier for businesses of all sizes and industries to build and scale their systems. Renesas' vision is to bring electronic design to a broader market and enable more innovation through cloud-based platforms. ”
In fact, Renesas Electronics has been working with Altium since last year, and in June '23, Renesas announced that it had standardized its PCB design on the Altium 365 cloud platform. Previously, Renesas used a variety of different PCB design software throughout the company because of the different software used by the different companies that Renesas acquired in the past. Partnering with Altium to unify PCB design tools will simplify the design of boards for demonstration and evaluation, reduce design complexity and development costs, and accelerate delivery to market.
It is worth mentioning that last month Renesas just spent 3$3.9 billion to complete a major acquisition. Renesas Electronics has acquired Transphorm, a leading supplier of gallium nitride (GaN) power semiconductors, to expand its presence in GaN applications such as automotive electronics and communications. In recent years, the competition in the global semiconductor industry has intensified, especially the rapid rise of China's semiconductor industry, which has swallowed up the original market of Japanese semiconductors, and at the beginning of 24 years, Renesas Electronics has made frequent moves, probably to consolidate its position and increase its market competitiveness through the expansion of business lines and the integration of the upstream and downstream of the industrial chain.
Renesas' acquisition of Altium is unlike any of its previous acquisitions. While most of Renesas' previous acquisitions as a chip design manufacturer have also been in the chip design field, Altium is a company that provides PCB design software, and Renesas has extended its acquisition to the EDA software field, which is upstream of chip design. The R&D cost and R&D speed of chips have always been a matter of great concern to chip manufacturers, the former determines the best advantages of chips, and the latter determines the response speed of manufacturers to the market. In the acquisition of Altium, Renesas said that the acquisition will greatly help the company's R&D costs and speed. The integration of chip design companies and upstream design software companies may become a trend for chip design manufacturers in the future.
On the one hand, many large chip manufacturers will also encounter the same situation as Renesas, that is, in the process of continuous acquisitions, different companies use different software, which will make it difficult to carry out collaborative development within the company and reduce the speed of research and development. With the acquisition of EDA Software, the company can unify design software, simplify design and product pricing, reduce design complexity, and accelerate R&D.
On the other hand, having a design software platform can also help chip companies move from chip vendors to solution providers. This will greatly increase the competitiveness of chip companies in the market. Renesas' acquisition of Altium is aimed at combining Altium's software platform with Renesas' embedded solutions to combine its MCUs, analog chips, power ICs, and other products. The merger will also enable integration with third-party vendors across the ecosystem to seamlessly perform all electronic design steps on the cloud. This significantly accelerates its pace of innovation and lowers the barrier to entry for system designers by reducing development resources and inefficiencies.
However, judging from the current market reaction, it seems that Renesas Electronics' acquisition of Altium is not optimistic. Since the announcement of the acquisition, Renesas' stock price has been **626% more.
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