Synopsys' purchase of Ansys raises competition concerns in the
supply of semiconductor chip design and light simulation products
in the UK – but deal could be approved by the CMA if its concerns
are resolved.
The Competition and Markets Authority (CMA) has found that
Synopsys' proposed purchase of Ansys for $35 billion could reduce
competition in the supply of certain semiconductor chip design
and light simulation products in the UK.
Semiconductor chips are crucial components in technologies used
every day by UK consumers (such as smartphones and laptops) and
also in key sectors including artificial intelligence (AI) and
cloud computing. Light simulation software is used for a wide
range of light-related products such as camera lenses, TV
displays, car headlights and lasers. Synopsys and Ansys are two
major suppliers in the semiconductor chip design and light
simulation software sector and their products help a broad range
of customers and industries.
Having assessed the evidence, the CMA believes the merger could
reduce choice for customers – which tend to be major companies
that operate globally and in the UK – that rely on these software
products. This could lead to a loss of innovation, lower quality
software and/or higher prices which may then be passed onto UK
businesses and consumers.
During its Phase 1 investigation, the CMA examined the impact of
the merger across a wide range of semiconductor chip design and
light simulation software markets, looking at the extent to which
Synopsys and Ansys currently compete or may do so in the future.
The CMA found that while the products the companies offer are
largely complementary, the deal could reduce competition in the
supply of three software products where Synopsys and Ansys have
strong market positions and compete closely with one
another.
The CMA's concerns are in relation to:
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global register transfer level power consumption analysis,
which is used to check how much power a chip consumes and
requires to function
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global optics software and global photonics software, which
are used to design and model light-related products
Synopsys and Ansys now have the opportunity to submit proposals
to address the CMA's concerns. If suitable proposals are not
submitted, the CMA will progress to an in-depth Phase 2
investigation.
Naomi Burgoyne, Senior Director of Mergers at the CMA,
said:
Synopsys and Ansys are important suppliers of semiconductor chip
design and light simulation software, and we're concerned that
this deal could reduce innovation and lead to higher prices for
these products in the UK.
Millions of businesses and consumers in the UK use products that
rely on these companies' software every day, whether that's
consumer electronic devices, medical equipment, modern vehicles
or even AI.
The companies now have the opportunity to offer solutions to
address our concerns, otherwise the deal will be referred to an
in-depth Phase 2 investigation.
More information on this case is available on the Synopsys / Ansys case
page.
Notes to Editors:
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Synopsys Inc is a US-based supplier of electronic design
automation (EDA) software used in the design of semiconductor
chips. Ansys Inc supplies simulation and analysis (S&A)
software which is used across various industries including
semiconductor design, as well as aerospace, automotive and
construction.
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The CMA also looked at whether Synopsys or Ansys offer
software products which are important inputs for their
competitors, and if so, whether they could limit their
rivals' access to these. The CMA also considered whether they
could degrade or remove interoperability between their
products and those of rivals. Ultimately, the CMA did not
find concerns in relation to this.
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Under the Enterprise Act 2002 (the Act) the CMA has a duty to
make a reference to Phase 2 if the CMA believes that it is or
may be the case that a relevant merger situation has been
created, or arrangements are in progress or contemplation
which, if carried into effect, will result in the creation of
a relevant merger situation; and the creation of that
situation has resulted, or may be expected to result, in a
substantial lessening of competition within any market or
markets in the UK for goods or services. Guidance on the
CMA's mergers jurisdiction and procedure can be read here.
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The merger is subject to a number of merger investigations in
other jurisdictions including in the EU, US, China, Japan and
South Korea and the CMA has engaged closely with certain
other agencies reviewing the merger throughout its
investigation as appropriate.
