Domestic EDA Industry Mergers Will Become a Regular Occurrence
Securities Times reporter, Ruan Runsheng
Few industries have a merger frequency comparable to the EDA industry.
Statistics show that the three giants in the global EDA market (Xilinx, Cadence, and Siemens EDA) have been directly involved in over 200 mergers. By continuously absorbing excellent tool companies from subfields, leading EDA enterprises are like "building with LEGO" blocks, constructing their own moats and solidifying their market positions.
Industry insiders point out that internationally, EDA tool companies are often acquired by giants or have their teams poached. Even if tool vendors go public independently, the market already has three main references, making it difficult to provide a better valuation, and customers prefer suppliers with more comprehensive toolchains.
In addition to being acquired by giants, EDA tool companies may also receive favor from non-EDA enterprises.
For example, Ausi is a global leading PCB (printed circuit board) design tool supplier. In February 2024, Renesas Electronics acquired Ausi for approximately $5.9 billion to establish an electronic systems and lifecycle management platform, achieving collaboration across components, subsystems, and system design, and enhancing the efficiency of circuit board design in the system design cycle.
Under industry and policy drivers, domestic listed EDA companies and emerging digital EDA companies have formed a mismatched competitive pattern with small startups. However, industry insiders feedback that domestic EDA enterprises are relatively dispersed, unable to form direct competition with international giants like Xilinx, Cadence, and Siemens EDA.
Domestic leading EDA companies also frequently engage in acquisition activities. As the pioneer of China's EDA industry, Hua Da Jiu Tian planned to acquire Xin'an Semiconductor in March this year, which was expected to integrate domestic EDA capabilities, but ultimately terminated due to disagreements over core terms. The company's high-ranking officials emphasized at a press conference that some domestic EDA companies have certain technological advantages in specific subfields, and Hua Da Jiu Tian will adopt an independent R&D, cooperative development, and integration model to accelerate its overall layout.
According to experts from the China Electronics Standardization Institute, the entire Chinese EDA ecosystem needs further integration, and M&A involves multiple factors such as the technological capabilities and willingness of enterprises, the industrial complementarity between acquirers and target companies, shareholder and customer networks, and regional factors. Previous cases have proven that without a leading enterprise's leadership in integrating resources and technology, mergers can only remain superficial, failing to produce genuine technical and market integration effects.