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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.

The analyst CIMdata writes in a comment on the deal that it is seen, ”as a continuation of the trend of convergence of domains for mechanical design and electronics system design, especially in the strategic role of simulation and analysis to develop products and solutions in several industries.”

It also notes that smart, connected products are common in many industries, and this Cadence acquisition follows other recent transactions in the S&A space, including Synopsys’ Ansys purchase and Keysight’s acquisition of ESI earlier this year, as reported by PLM&ERP News.

Example of a jet engine simulation session in BETA CAE.

S&A a key technology
The S&A segment is growing faster than the MCAD and data management segments and is seen as a key in the enterprise digital engineering and transformation puzzle. This acquisition underlines the importance of S&A and EDA to respond to the trend of smart, connected products.

For Cadence, it is of course also no disadvantage that you get a number of larger customers in the bargain, moreover in industries that are the largest in terms of consumption of S&A software and services. Automotive & Transportation are the biggest users/investors of CAE solutions, in 2022 they bet totally $2.5 billion in the domain; followed by Aerospace & Defense at $2.0 billion, and with Electronics/High-Tech in bronze place at just under $1.5 billion.

Moreover, Synopsys purchase of Ansys probably played a role…

BETA ANSA is the flagship product
BETA CAE has grown both steadily and often at double-digit growth rates, at between 8 to 15 percent per year over the past decade. The company has its headquarters in Switzerland since 2018, while the R&D part remains in Greece, where the company was founded.

Among the company’s important acquisitions, the purchase of Japan’s Top CAE Corporation in February 2017 stands out. Another interesting BETA purchase is Indian VARDAR CAE Technologies.

BETA CAE’s flagship product is ANSA, which is widely used in automotive, transport and heavy equipment industry for structural NVH (noise/vibration/harshness) analysis, crash simulation and occupant safety certification. Another core product is META, a high performance multidisciplinary CAE post processor.

BETA CAE’s revenue was $123 million in 2022, up 8 percent from 2021.

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