Increased Simulation & Analysis Needs Within ELECTRONICS DESIGN and a Wider Customer Base: Why Cadence buys BETA CAE Systems

STRONG IN AUTOMTIVE and AEROSPACE. Today, we see several proofs that the needs for advanced simulation capabilities are growing in electronics design and product development. EDA, Electronic Design Automation, is the designation for this domain, which deals with digital tools for designing printed circuit boards (PCBs), integrated circuits (ICs), chips, and the like. Not least Synopsys' recent purchase of the market leader in Simulation & Analysis (S&A), Ansys, stands out here. But there's more to come: The prominent EDA player, Cadence, is buying BETA CAE Systems for $1.24 billion. BETA CAE developed an engineering platform for multi-domain engineering simulation solutions. The company is strong in above all automotive, with for example the German automotive icon BMW as a user.
So, things are really moving within EDA and S&A. Both these PLM domains have during the last decade grown considerably in importance in the light of the increasingly digitized development processes, product electronification, and the explosively increasing presence of software. When products initially exist as digital prototypes and 3D models, it is a natural consequence that the needs for things like function tests, material trials, integration assurance and various types of validations must be done digitally. Moreover, at these stages it is still cheap and relatively easy to change or correct things. Today, EDA is thus by far the largest commercial domain in terms of the world's companies' PLM investments, just over 22 percent of the total and just under 15 billion dollars, while Simulation & Analysis lands on the third place with a close to 14 percent market share, just behind the cPDm segment (PLM/ PDM, collaborative Product Definition management). According to the analyst CIMdata, roughly $9.2 billion are invested globally in S&A.
For Cadence, the now announced purchase is a logical development. The company has expanded its portfolio of technical simulation solutions through acquisitions in recent years. In 2022, they bought Future Facilities, a specialist in electronic cooling analysis, and OpenEye, which focuses on molecular modeling and simulation. They also recently launched their Millennium Enterprise Multiphysics Platform, a dedicated hardware/software acceleration platform that leverages both GPUs (Graphics Processors) and CPUs (Central Processing Units), underscoring a commitment to innovative products and solutions. Prior to this acquisition, the company's S&A revenue, according to CIMdata, was $153 million for calendar year 2022. About BETA CAE it can be noted that their ANSA solution is very well established in automotive. But with the purchase, the Cadence multiphysics portfolio also gains a significant presence in the electronics and semiconductor, aerospace, and marine industries. In addition, the Cadence Fidelity Computational Fluid Dynamics (CFD) portfolio, combined with BETA CAE ANSA, META, SPDRM and other offerings, is expected to provide significant new market opportunities for the combined capabilities.