News & Analysis

Synopsys buys Ansys to create silicon to systems powerhouse

16th January 2024
Mick Elliott

Synopsys is buying Ansys for $35 billion. The deal combines Synopsys' semiconductor electronic design automation (EDA) with Ansys' broad simulation and analysis portfolio creating a company offering silicon to systems design solutions.

The two companies, which have worked together since 2017, say they have complementary businesses and significant expansion opportunities. The combination will enhance Synopsys' Silicon to Systems strategy both across the core EDA segment and in highly attractive adjacent growth areas such as Automotive, Aerospace and Industrial, among others, where Ansys has an established presence and successful go-to-market experience.

Synopsys' total addressable market (TAM) is expected to increase by 1.5 times to approximately $28 billion. This combined TAM is expected to grow at roughly an 11% CAGR, driven by megatrends accelerating the need for the fusion of electronics and physics across industries.

Cost savings of $400 million will be delivered three years after the deal and $400m added to revenues by year four post the deal.

"The megatrends of AI, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity. Bringing together Synopsys' industry-leading EDA solutions with Ansys' world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful and seamlessly integrated silicon to systems approach to innovation to help maximize the capabilities of technology R&D teams across a broad range of industries," said Sassine Ghazi, President and CEO of Synopsys. "This is the logical next step for our successful, seven-year partnership with Ansys and I look forward to working closely with Ajei and the talented Ansys team to realize the benefits of this combination for our customers, shareholders and employees."

"For more than 50 years, Ansys has enabled customers to design, develop and deliver cutting-edge products that are limited only by imagination. By joining forces with Synopsys, we will amplify our joint efforts to drive new levels of customer innovation," said Ajei Gopal, President and CEO of Ansys. "This transformative combination brings together each company's highly complementary capabilities to meet the evolving needs of today's engineers and give them unprecedented insight into the performance of their products. Ansys has a strong foundation, as demonstrated by preliminary annual contract value results for Q4 that are expected to exceed the high end of our guidance, and I am confident that building on our partnership with Synopsys will position us well to deliver even greater value for our customers, partners and shareholders. The combined company will accelerate the development of our joint portfolio and deliver an increased level of innovation, which will benefit Ansys' traditional customers. I am proud of all that our employees do every day to make Ansys and our customers successful and look forward to the combined company achieving even greater heights in this next chapter."

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