The EDA Giants Compete for Altair?

In a surprising turn of events, news broke yesterday about the interest of PTC and Cadence in acquiring Altair Engineering, a prominent software companyToday, Bloomberg shared further insights from knowledgeable sources indicating that Siemens AG is currently engaged in negotiations for a potential acquisition of Altair EngineeringIf the deal comes to fruition, it would mark one of the largest mergers in the history of the German industrial giantHowever, the discussions are still ongoing, and it remains uncertain whether Siemens will ultimately decide to proceed with the acquisition.

This situation is particularly intriguing given Siemens' history of significant acquisitions, including its earlier purchase of Mentor Graphics, one of the three giants in Electronic Design Automation (EDA). If the rumors hold true, the competitive landscape is heating up, especially after Synopsys acquired Ansys, signaling the onset of a new round of rivalry among the major players in the EDA sector.

Who exactly is Altair Engineering?

According to Wikipedia, Altair Engineering Inc. is an American technology company headquartered in Troy, MichiganFounded in 1985 by James RScapa, George Christ, and Mark Kistner, Altair provides software and cloud solutions for simulation, Internet of Things (IoT), high-performance computing (HPC), data analytics, and artificial intelligence (AI).

Initially, Altair was an engineering consulting firmHowever, over the years, it expanded its product offerings into the fields of product development and computer-aided engineering (CAE) softwareIn the 1990s, the company became well-known for software products such as HyperWorks, OptiStruct, and HyperMesh, which are frequently used in product development within the automotive industry.

As described in its financial documentation, Altair Engineering Inc. positions itself as a global leader in computational science and AI, enabling organizations across various sectors to make more informed decisions in an increasingly interconnected world

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The company offers software and cloud solutions in simulation, HPC, data analytics, and AI, leveraging computational science to foster innovation and smart decision-making towards a more connected, secure, and sustainable future.

Over the years, Altair has seamlessly integrated AI technology into its products, believing that the expanding application of this technology aligns perfectly with its offerings, client applications, and market opportunities.

Altair has emphasized that its simulation and AI-driven innovative approaches are underpinned by an extensive portfolio of high-fidelity and high-performance physics solvers, industry-leading optimization and HPC technologies, and a comprehensive end-to-end platform for developing AI and digital twin solutionsThe integrated software suite aims to optimize design performance across multiple disciplines, including structural, motion, fluid, 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 computing resources, simplifying the workflow management of compute-intensive tasks, including AI, modeling, simulation, and visualization,” the company notedTheir data analytics, AI, and IoT products encompass data preparation, data science, MLOps, orchestration, and visualization solutions that support engineering, scientific, and business decision-making.

To summarize, as Altair describes, it is a leading provider of design and simulation software, helping clients enhance product performance, reduce development times, and lower costsThe company boasts a unique proposition in the industry due to the depth and breadth of its engineering application software products, combined with its expertise and proprietary technology in leveraging HPC, cloud infrastructure, and AI.

These leading initiatives have contributed significantly to Altair's financial success.

According to financial reports, Altair's total revenue for the 2023 fiscal year was $612.7 million, compared to $572.2 million for the whole of 2022. Software product revenue alone amounted to $550 million in 2023, a rise from $506.5 million the previous year

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As of December 31, 2023, the company employed over 3,200 internal staff globally, with an additional 200 client engineering service employeesMore than two-thirds of the workforce is based in the United States, India, Germany, and the United Kingdom.

Since the start of the year, Altair's share price has surged by 27%, resulting in a market capitalization of $9.1 billion.

What products does Altair offer?

As a non-specialist observer, I find myself grappling with a complete understanding of Altair Engineering’s specialized products and applicationsIts channel partner, Trueinsight, also highlights that while Altair Engineering is known for several outstanding tools, a clear classification can be drawn into four main segments: Design Phase Solutions, HyperWorks Solutions, Electromagnetic and Electronic Solutions, and Data Analytics and Machine Learning.

Looking first at the Design Phase Solutions, Trueinsight refers to these as "Designer-Level" tools, designed for use during the design phase to run simulation testsThese tools are powerful but maintain a usability that is often absent in other advanced toolsEssentially, they retain the easy-to-use nature of CAD tools while offering a plethora of additional simulation functionalities.

For instance, Altair Inspire is actually a collection of 15 tools in one, allowing users to create geometry in a parametric, top-down process or in a more industrial-design push-pull environment, then run significant analyses such as statics and dynamics, fatigue, vibration, and thermal tests.

Meanwhile, Altair SimSolid has gained popularity by enabling users to bypass the time-consuming and error-prone steps typically associated with simulationsBeing a meshless simulation tool means that users need not worry about simplifying geometries or creating meshes, allowing them to dive directly into setting their studiesBased on this tool, users can run conventional tests, such as static, dynamic, transient, or steady-state thermal, vibration, and nonlinear tests.

Altair SimLab empowers users to conduct genuine multiphysics coupled analyses, integrating structural, fluid, and electromagnetic variables

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In structural aspects, one can carry out linear, nonlinear, transient, or steady-state thermal tests, static and dynamic testing, which can then be combined with Altair Acusolve solver for heat transfer and fluid flow through built-in CFD featuresA standout feature of SimLab is its automation capabilities, allowing users to create automated workflows without specialized coding knowledge, thereby significantly enhancing their processes.

Next, we turn to HyperWorks Solutions.

Famed for its robust high-end simulation capabilities, HyperWorks encompasses tools from pre-processing, solvers, to post-processing tools all integrated within a singular interfaceIncluded in this suite are the industry-leading preprocessing tool Altair HyperMesh, solvers such as Altair OptiStruct for implicit and explicit testing and topology optimization, as well as Altair Radioss for extreme conditions and highly nonlinear scenarios, and Altair HyperWorks CFD covering a vast range of applications within the industry.

Moreover, this suite incorporates Altair HyperWorks, wherein developers can utilize advanced composite materials to ensure the highest accuracy of resultsFrom material properties to laminate design and simulation, HyperWorks offers powerful tools and workflows to guarantee the accuracy and reliability of composite structuresEngineers can explore various material orientations, layer thicknesses, and stacking sequences to optimize the weight, strength, and performance of composite structures.

Turning our attention to Electromagnetic and Electronic Solutions, Altair has seen a swift increase in offerings in this domain over the past few yearsThis includes simulation tools like Altair Feko, designed for users needing to understand high-frequency applications such as electromagnetic compatibility, antenna design and placement (including 5G applications), scattering analysis, and radar cross-section analysisThe Altair Flux tool allows for the precise analysis and optimization of electromagnetic devices, such as motors, generators, transformers, and actuators.

Furthermore, Altair offers leading-edge power electronics simulation and design software called Altair PSIM (formerly Powersim), enabling engineers to accurately model and analyze complex power electronic systems, including converters, inverters, motor drivers, and renewable energy systems

This design suite optimizes the design of power supplies, EMI filters, and motor driver systems, and it can integrate with other design and simulation tools for joint simulations, such as Simulink, LTSpice, or the Altair tool suite like Altair Embed and Compose.

Lastly, for PCB electrical simulation, Altair provides a comprehensive set of design and manufacturing validation tools known as Altair PollExThese tools allow users to inspect EMI vulnerabilities and ESD protection, along with signal and power integrity analysis, PCB design review, and end-of-line testing for PCB manufacturing processesPollEx encompasses a parts library, facilitating collaboration among project stakeholders regarding physical, logical, thermal, electrical, and assembly data, while being compatible with all major ECAD file formats, including Altium, Cadence, Mentor Graphics, and Zuken.

On the Data Analytics and Machine Learning front, Altair features a robust data extraction tool Altair Monarch, a tool for building predictive models using various algorithms known as Altair Knowledge Studio, a package for creating and modifying various data visualization schemes called Altair Panopticon, and a suite of data science and predictive analytics tools from RapidMiner.

Trueinsight emphasizes that when all these tools are combined, they create some of the market's most powerful data solutions.

Many view Altair as an emerging star in the EDA domain, especially as they have intensified their efforts in this area over the last few yearsFor example, in 2017, Altair acquired Runtime Design Automation, which provided EDA tools for CPU, GPU, and System on Chip (SoC) design engineersAdditionally, in June 2022, Altair announced the acquisition of Concept Engineering, a supplier of automated schematic generation tools and electronic circuit and wiring harness visualization platforms.

This July, Altair acquired all outstanding shares of Metrics Design Automation Inc., an entity led by legendary EDA figure Joe Costello, who previously served as CEO of Cadence

Metrics offers a groundbreaking simulation-as-a-service (SaaS) business model focused on semiconductor electronic functional simulation and design validationThe completion of this transaction hinged on routine conditions.

According to Altair, this acquisition has the potential to disrupt the semiconductor and EDA market, which currently seems dominated by only a few significant playersAltair's Silicon Debug Tools delivers world-class simulation environments and boasts industry-leading simulation and debugging capabilitiesTheir cloud-based business model has the potential to reshape the semiconductor space, providing organizations aiming to substantially accelerate design cycles with affordable and accessible high-quality EDA design tools.

As stated on their website, semiconductor design leaders rely on EDA software to design and evaluate their product reference designs efficiently, allowing Altair's semiconductor design solutions to optimize EDA design, improve the design-to-manufacture process, eliminate iterations, and reduce time to market for products.

For PCB design, embedded system development, silicon debug/semiconductor debugging, and smart product implementation, Altair offers tools that address the rising performance demands and challenges posed by product complexityMoreover, their solutions can simulate structural, thermal, and fluid characteristics in single multiphysics environments, assessing normal use or misuse scenarios to ensure reliability and safety.

Among the tools, Altair Accelerator stands out as the trusted industry’s fastest enterprise job scheduler in the semiconductor design and EDA spheres, utilizing a scalable event-driven architecture for achieving maximum throughputAccelerator significantly enhances capacity utilization by handling millions of semiconductor design jobs daily, with delays measured in milliseconds, thus delivering optimal performanceIt offers a scalable small architecture along with comprehensive policy management features, including advanced license scheduling tracks, queue-free license usage, and dynamic license checkouts throughout job lifecycles.

Proven solutions like Altair Silicon Debug Tools facilitate engineers in visualizing and debugging IC designs efficiently

Altair's DSim provides a scalable, SaaS-based simulation environment for ASIC and FPGA development, allowing seamless transitions from desktop to cloud, making it economically accessible for all innovators.

Furthermore, Altair PollEx serves as the most comprehensive, integrated toolkit for semiconductor reference and PCB design viewing, analysis, and validation, geared toward electrical, electronic, and manufacturing engineersPollEx's seamless data transfer functionalities link it with the widely used ECAD and simulation tools in the semiconductor industry, enabling leading global electronics companies to swiftly view and review PCB designsIts inspection tools can identify issues early in the design process, thereby averting product failures and streamlining manufacturing and assembly processes.

Altair Embed is a proven tool for model-based firmware development for embedded systems, including motor control, IoT devices, and vision systems.

Altair's Unified Design Environment (UDE) represents a complete hardware design ecosystem geared for electrical engineers, PCB designers, CAE and MCAD engineers, and reviewers, ensuring transparent data access, IP protection, and adherence to the highest security standards.

With Altair Breeze, every engineer can emerge as an I/O expertThis solution allows semiconductor design organizations to swiftly address software deployment issues while resolving data file and network dependenciesAltair Breeze generates detailed reports on stored exported data, facilitating the identification of good and bad I/O to ensure successful outcomes.

Lastly, Altair Mistral functions as a leading high-performance computing (HPC) and scientific computing applications monitoring toolIt is lightweight enough for production deployment yet flexible enough to ensure maximum benefits from local HPC and provide the necessary insight to manage hybrid clouds.

In conclusion, Altair possesses a comprehensive suite of tools necessary for managing and optimizing EDA computing environments.

As we seek to understand the motives behind the potential acquisition maneuvers among EDA giants, it's essential to first observe the ongoing shifts within the semiconductor industry.

It is well known that as process technology advances slow down, increasing transistor counts make chip development increasingly challenging

To achieve optimal power, performance, and area (PPA) outcomes, today's chip designers must collaborate closely with foundries to optimize their designs and fabrication techniques—a strategy commonly referred to as Design Technology Co-Optimization (DTCO). Looking ahead, chip designers will need to construct multi-chip solutions to better meet the demanding application requirements, advancing beyond DTCO into a methodology known as Systems Technology Co-Optimization (STCO).

This growing complexity in system architecture has motivated Synopsys to acquire AnsysAccording to the company’s president and CEO Sassine Ghazi: “In the face of increasing system complexity, trends towards artificial intelligence, silicon diffusion, and software-defined systems prompt a demand for higher computing performance and efficiencyThe combination of Synopsys' industry-leading EDA solutions with Ansys’ top-tier simulation and analysis capabilities allows us to offer a comprehensive, robust, and seamlessly integrated innovation approach from silicon to system, helping maximize the potential of technology development teams across various sectors.”

Expert analysts have suggested that this transition in the industry indicates Ansys's design analysis and simulation’s particular significance for customers using Synopsys EDA tools, especially once fully integrated with Synopsys software, enhance software solutions—especially those powered by artificial intelligence—promises to offer a top-down suite necessary for designing the next generation of processors and systems.

Long before Ansys's acquisition, analysts had posited that Altair would be the last unconstrained contender able to challenge AnsysAs one of the most proactive CAE companies in recent years, company founder and CEO James RScapa has been working tirelessly to expand, refine, and integrate the entire suite of simulation software, reinforcing Altair's position at the intersection of simulation, HPC, and AI.

Consequently, amid rumors of being up for sale, Altair has attracted interest from potential acquirers like Siemens and Cadence.

For Siemens, pursuing this acquisition aligns with the strategic transformation of the company toward software and would significantly bolster its position in the EDA landscape.

On the rumor surrounding Cadence’s acquisition offer, analyst Joe Vruwink, in a client report, stated: “While we appreciate the storyline of Cadence potentially acquiring Altair after obtaining Joe Costello's Metrics (if you will, a closing of the Cadence circle…), we acknowledge that, given Cadence's previous acquisition of BETA CAE and its overlapping capabilities within FEA and automotive/aerospace domains, the rationale for a Cadence + Altair combination has become less compelling.”

Another analyst, Vruwink, maintained an "outperform" rating for Cadence Design Systems, suggesting he was not "against" the idea of Cadence acquiring Altair, recognizing that such a transaction could enhance Cadence's influence in new markets while yielding positive investments for their electronics portfolio

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