Source: Semiconductor Observation

Author: Li Shoupeng

Following yesterday's report $PTC Inc (PTC.US)$ and $Cadence Design Systems (CDNS.US)$ Interested in bidding for a software company $Altair Engineering (ALTR.US)$according to Bloomberg citing sources familiar with the matter. $SIEMENS AG (SIEGY.US)$ The company is in negotiations over a potential acquisition of software manufacturer Altair Engineering. If successful, it will be one of the largest mergers in the history of this German giant. However, insiders also indicate that the negotiations are still ongoing, and Siemens' decision to finalize the deal is uncertain.

Additionally, because Siemens completed the acquisition of one of the EDA triumvirate, Mentor Graphics, some years ago. This means, if the related rumors are true, after the acquisition of synopsys (SNPS.US) and ansys (ANSS.US), the two giants of EDA have embarked on another round of new competition. $Synopsys (SNPS.US)$ acquired$Ansys (ANSS.US)$After that, the two giants of EDA have started another round of new competition.

Who is Altair Engineering?

According to Wikipedia, Altair Engineering Inc. is an information technology company headquartered in Troy, Michigan, USA, founded by James R. Scapa, George Christ, and Mark Kistner in 1985. It provides software and cloud solutions for simulation, internet of things, high-performance computing (HPC), data analysis, and artificial intelligence (AI).

At the beginning, Altair was an engineering consulting company. Later, they expanded their product line to the field of product development and computer-aided engineering (CAE) software. In the 1990s, it became known for software products like HyperWorks, OptiStruct, and HyperMesh, which are commonly used in the automotive industry for product development.

According to the company's financial prospectus, Altair Engineering Inc. ('Altair') is a global leader in computational science and artificial intelligence, enabling organizations in various industries to make smarter decisions in an increasingly interconnected world. The company provides software and cloud solutions in the areas of simulation, high-performance computing (HPC), data analytics, and artificial intelligence (AI). These products and services leverage computational science to drive innovation and intelligent decision-making for a more connected, secure, and sustainable future.

Altair has stated that over the years, the company has consistently integrated AI technology into their products, believing in the widespread applicability of this technology to suit their products, customer applications, and market opportunities.

Altair plainly states that the company's simulation and AI-driven innovation approach is supported by a comprehensive suite of high-fidelity and high-performance physics solvers, market-leading optimization and HPC technology, as well as an end-to-end platform for developing AI and digital twin solutions. The company's integrated software suite optimizes design performance across multiple disciplines such as structures, motion, fluids, thermal, electromagnetic, system modeling, and embedded systems, while also providing AI solutions and realistic visualization and rendering.

"Our HPC solutions maximize the effective utilization of complex computational resources and streamline workflow management for compute-intensive tasks, including AI, modeling and simulation, and visualization applications. Our data analytics, AI, and Internet of Things (IoT) products encompass data preparation, data science, MLOps, orchestration, and visualization solutions to support engineering, scientific, and business decision-making," emphasizes Altair.

In summary, as Altair puts it, the company is a leading provider of design and simulation software that helps customers improve product performance, shorten development time, and reduce costs. The company's team believes that Altair is unique in the industry due to the depth and breadth of its engineering application software products, combined with the company's expertise and proprietary technology in utilizing HPC, cloud infrastructure, and AI.

These leading initiatives have enabled Altair to achieve good financial performance.

According to the financial report, in the 2023 fiscal year, Altair's total revenue was 0.6127 billion dollars, compared to 0.5722 billion dollars for the full year 2022. Specifically, software product revenue was 0.55 billion dollars, compared to 0.5065 billion dollars for the full year 2022. In terms of employees, as of December 31, 2023, the company has over 3,200 internal employees globally and over 200 onsite customer engineering service employees. Over two-thirds of the company's employees are in the USA, India, Germany, and the United Kingdom.

Altair's stock price has risen by 27% since the beginning of the year, with a market cap reaching $9.1 billion.

What products does Altair offer?

As a non-professional observer, I do not quite understand the specific products and applications of Altair Engineering. Its channel partner trueinsight also mentioned in an article that Altair Engineering is known for some outstanding tools.

According to its classification, it can be divided into four main parts: Design Phase Solutions, HyperWorks Solutions, Electromagnetic and Electronic Solutions, and Data Analytics and Machine Learning.

First, let's look at the solutions of Design Phase Solutions, which trueinsight refers to as "Designer-Level" tools. According to their viewpoint, these tools are very suitable for running simulation tests in the design phase workflow. These tools are not only powerful but also have user-friendly features that other powerful tools often lack. Essentially, they retain the ease of use of CAD tools but provide many additional simulation functions.

As shown in the diagram above, the solutions at this stage include Altair Inspire, Altair SimSolid, and Altair SimLab.

According to the introduction, Altair Inspire is actually a combination of 15 tools that allow you to create geometries in a parametric, top-down process or in an environment with more industrial design, and then perform important analyses such as statics, dynamics, fatigue, vibration, and thermal tests.

Altair SimSolid is becoming increasingly popular as it allows users to bypass some time-consuming and error-prone steps typically associated with simulations. Because it is a meshless simulation tool, users do not have to worry about simplifying geometry or creating meshes, they can start setting up their research directly. Users can run traditional tests based on this, such as static, dynamic, transient or steady-state heat, vibration, and nonlinear tests.

Altair SimLab allows users to perform real multi-physics field coupling analysis, including structural, fluid, and electromagnetic variables. In terms of structure, you can run linear, nonlinear, transient or steady heat, static and dynamic tests - then combine it with Altair Acusolve solver for internal CFD functionality, for heat transfer and fluid flow - and then use the coupled electromagnetic tools to obtain complete images. A very powerful feature in SimLab is the ability to create automated workflows without the need for coding expertise. The built-in automation tools allow users to significantly accelerate their processes.

Next, let's take a look at the 'HyperWorks' solution.

According to the introduction, HyperWorks is known for its powerful high-end simulation capabilities, from preprocessing to solvers and post-processing tools. The products in this solution are basically tools built into the HyperWorks interface. These include but are not limited to industry-leading pre-processing tool Altair HyperMesh, solver Altair OptiStruct for implicit and explicit tests and topology optimization, solver Altair Radioss for extreme conditions and highly nonlinear situations, and solver Altair HyperWorks CFD covering most applications in the industry.

In addition, these tools also include Altair HyperWorks, where developers can use advanced composite materials to ensure the highest accuracy of results. From material properties to laminate design and simulation, HyperWorks offers powerful tools and workflows to ensure the accuracy and reliability of composite structures. Engineers can explore different material orientations, ply thicknesses, and stacking sequences to optimize the weight, strength, and performance of composite structures.

Now let's look at electromagnetic and electronic solutions;

According to the introduction, Altair's solutions in this area have grown rapidly in recent years. These include simulation tools such as Altair Feko for high-frequency applications (such as electromagnetic compatibility, antenna design and placement - including 5G applications), Altair Flux and Flux Motor for accurate analysis and optimization of electromagnetic devices such as electric motors, generators, transformers, and actuators.

In addition, Altair also provides industry-leading power electronics simulation and design software Altair PSIM (previously known as Powersim) in this field. Based on this, engineers can accurately model and analyze complex power electronic systems, including converters, inverters, motor drives, and renewable energy systems. With its design suite, users can efficiently design power supplies, EMI filters, and motor drive systems. Link to other design and simulation tools for co-simulation, such as Simulink, LTSpice or Altair tool suites like Altair Embed and Compose.

For PCB-side electrical simulation, Altair offers a complete set of PCB design and manufacturing verification tools with Altair PollEx. Users can check EMI vulnerabilities and ESD protection, signal and power integrity, PCB design reviews, and end-of-line testing for PCB manufacturing processes. PollEx includes a component library that allows collaboration on physical, logical, thermal, electrical, and assembly data within the project and is compatible with all major ECAD file formats, including Altium, Cadence, Mentor Graphics, and Zuken.

Finally, in terms of data analysis and machine learning, it covers a powerful set of data extraction tools Altair Monarch, enabling users to build predictive models using various algorithms with Altair Knowledge Studio, allowing the creation, modification, and use of different data visualization schemes with Altair Panopticon, and possessing a complete set of data science and predictive analysis tools from RapidMiner.

Trueinsight emphasizes that when all these tools are combined, it indeed creates the most powerful data solutions in the market.

A rising star in the EDA industry.

From the above discussion, we can consider Altair as a giant in the CAE and simulation field. However, in reality, in recent years, they have been increasing their investment in the EDA field familiar to us.

For example, in 2017, Altair acquired Runtime Design Automation, which provides services to design engineers utilizing EDA tools to design CPUs, GPUs, and System-on-Chips (SoCs); in June 2022, Altair announced the acquisition of Concept Engineering, a supplier of automatic schematic generation tools, electronic circuit, and wire harness visualization platforms.

In July of this year, they acquired all outstanding shares of Metrics Design Automation Inc., led by EDA industry legend Joe Costello (former Cadence CEO). Metrics is a Canadian company with a disruptive Simulation as a Service (SaaS) business model for semiconductor electronic function simulation and design verification. The completion of the transaction is subject to customary conditions.

In Altair's view, this acquisition will disrupt the semiconductor and EDA market, which currently seems to be dominated by a few large organizations. Apart from Altair Silicon Debug Tools providing a world-class simulation environment and having industry-leading simulation and debugging capabilities, our cloud-based business model also has the potential to change the semiconductor sector, enabling organizations looking to significantly accelerate design cycles to obtain high-quality EDA design tools at more affordable prices and in a more convenient way.

As stated on their website, industry leaders in semiconductor design rely on Electronic Design Automation (EDA) software to efficiently design and evaluate their product reference designs, and Altair's semiconductor design solutions aim to optimize EDA design, improve the design-to-manufacture process, eliminate iterations, and shorten time to market for products.

For semiconductor reference (PCB) design, embedded system development, silicon debugging/semiconductor debugging, and intelligent product realization, Altair provides tools to address growing performance requirements and product complexity challenges. In addition, Altair solutions can simulate structural, thermal, and fluid characteristics, vibrations, and constraints in a single multi-physics environment for normal usage or misuse scenarios to ensure reliability and safety.

Among them, Altair Accelerator is the fastest enterprise job scheduling program trusted by the semiconductor design and EDA industry. Its scalable event-driven architecture allows for the highest throughput. Accelerator maximizes capacity utilization, running millions of semiconductor design jobs per day with latencies below milliseconds, ensuring top performance. It offers a scalable small footprint architecture and comprehensive policy management features, including advanced license scheduling tracks, out-of-queue license usage, and dynamic license checkout during job lifecycle.

Altair Silicon Debug Tools and other trusted solutions help engineers efficiently visualize and debug IC designs. Altair® DSim provides a scalable SaaS-based SystemVerilog and VHDL simulation environment for ASIC and FPGA development, seamlessly transitioning from desktop to the cloud, offering economical accessibility to all innovators.

Altair PollEx is the most comprehensive, integrated semiconductor reference and PCB design viewing, analysis, and validation toolset for electrical, electronic, and manufacturing engineers. With seamless data transfer capabilities, PollEx serves as a vital link between the most widely used ECAD and simulation tools in the semiconductor industry, enabling top electronic companies to quickly review and inspect PCB designs. Its inspection tools detect problems early in the design phase, preventing product failures and streamlining manufacturing and assembly.

Altair® Embed is a validated tool for model-based embedded system firmware development, including motor control, Internet of Things (IoT) devices, and vision systems.

Altair Unified Design Environment (UDE) is a complete hardware design ecosystem that serves as the center for electrical engineers, PCB designers, CAE and MCAD engineers, and reviewers, with transparent data access, IP protection, and the highest security standards.

Altair Breeze empowers every engineer to become an I/O expert. Altair Breeze enables semiconductor design organizations to quickly address software deployment issues and resolve file and network dependencies. Altair Breeze provides detailed storage export data and shared summary reports to identify good and bad I/O, making victories easy.

Altair Mistral is a leading high-performance computing (HPC) and scientific computing application monitoring tool. It is lightweight enough for production use, yet flexible enough to ensure you maximize benefits from local HPC and have the necessary information for managing hybrid clouds.

In short, Altair has all the tools needed to manage and optimize the EDA computing environment.

Why are the EDA giants "bidding"?

Before specifically explaining this, let's take a look at some changes happening in the semiconductor industry.

It is well known that nowadays, as transistor numbers increase while process technology advancements slow down, chip development becomes increasingly challenging. To achieve optimal Power, Performance, and Area (PPA) results, chip designers today must closely collaborate with foundries to optimize their designs and process technologies, a method known as Design Technology Co-Optimization (DTCO). Looking ahead, chip designers will have to build multi-chip solutions to better meet demanding applications, go beyond DTCO, and systemically optimize their solutions at a system level, a method known as System Technology Co-Optimization (STCO).

For this reason, Synopsys has chosen to acquire Ansys.

Just as $Synopsys (SNPS.US)$ President and CEO Sassine Ghazi said: "Facing the increasing complexity of systems, the major trends of artificial intelligence, silicon diffusion, and software-defined systems require higher computing performance and efficiency. Combining Synopsys' leading EDA solutions with Ansys' first-class simulation and analysis capabilities enables us to provide a comprehensive, powerful, and seamlessly integrated innovative approach from silicon to system, helping unleash the capabilities of technology R&D teams in various industries to the fullest."

分析人士也认为，上述的行业转变正是Ansys 的设计分析和仿真对于使用 Synopsys EDA 工具的客户发挥特别作用的地方。因为一旦它们与 Synopsys 软件（尤其是那些通过人工智能增强的软件）完全集成，该公司将能够提供自上而下的软件包来设计下一代处理器和系统。

其实早在Ansys被收购了以后，就有分析人士表示， Altair将成为最后一个可以挑战 Ansys 的不受约束的玩家。作为近年来最积极主动的 CAE 公司之一的负责人，公司创始人兼首席执行官 James R. Scapa过去几年里也一直带领公司努力扩展、完善和整合其整个仿真软件套件。这加强Altair 在仿真、高性能计算 (HPC) 和人工智能 (AI) 融合点上的地位。

于是，在被传出有意出售以后，就获得了包括西门子和Cadence的传言并购。

对于西门子而言，潜在的收购符合公司向软件的转型的经营思路，也让公司在EDA上更如虎添翼。

针对Cadnece的收购传言，分析师 Joe Vruwink 在给客户的报告中写道：“虽然我们很欣赏 Cadence 在收购 Joe Costello 的 Metrics 后收购 Altair 的故事情节（如果你愿意的话，可以说这是 Cadence 圈子的终结......），但我们承认，在 Cadence 收购 BETA CAE 并在 FEA 和汽车/航空航天领域拥有重叠能力后，Cadence + Altair 的组合变得不那么有意义了。”

另一位分析师Vruwink 对 $Cadence Design Systems (CDNS.US)$ 的评级为增持，他表示，他并不“反对”Cadence 收购 Altair，因为基于产品优势，这笔潜在的交易可能会为 Cadence 在新市场增添助力，同时还能积极投资电子产品组合。“然而，考虑到 Cadence 的系统设计和分析产品组合以及上述对 BETA CAE 的收购，Altair 可能还有其他追求者。”Vruwink强调。

However, Oppenheimer analyst Ken WONG bluntly stated: "If Altair is acquired by an EDA supplier, the synergistic effect in the short term will be small because its market share in the semiconductor/technology field is small."

Editor/Rocky