M & A pace of the semiconductor industry this year, compared with the previous two years has slowed down, Chinese semiconductor companies overseas mergers and acquisitions have also ran aground.Do you think the next semiconductor industry mergers and acquisitions how?
To date, 2017 appears to be a year of drastic reductions in mergers and acquisitions in the semiconductor industry, with Toshiba M & A announcements in the context of a nearly $ 100 billion market cap for 2015 and 2016. However, the recent The takeover offer from Broadcom and the Marvell / Cavium merger have brought us back to the long lost ground.
A closer look at the recent history of M & A in semiconductor companies shows that M & A that drives M & A is not about companies with a total revenue and economies of scale but in specific segments of the semiconductor market such as automotive, wireless handsets and networks , A company with higher market share and profitability.On the other hand, the abundant funds brought by the global easing monetary policy also play a role in fueling.This specialization trend is likely to continue, because it can improve TI, Broadcom, NXP and other leading professional companies profitability.
However, with the exception of memory companies, it is unlikely that the semiconductor industry will continue its overall integration as there is no correlation between the total revenues of semiconductor companies and operating profit margins.
After a certain period of development, enterprises may adopt radical methods of M & A for development due to slower growth, market stability and other reasons, and for them, how radical and stable they should be along the path of development How is Mentor planning for future growth in this area?
Unlike other EDA companies, Mentor relied heavily on in-house research and development to create its own products for 36 years of its history and although we also had some acquisitions, we acquired only a small percentage of our revenue Caliber , TestKompress, Cell Aware Test, and much more were all conceived and developed within Mentor, and most of the creators are still with Mentor.
In the future, our merger with Siemens will bring us a whole new opportunity to accelerate the pace of development through mergers and acquisitions, until we were constrained by the lack of financial resources to compete for mass M & A. Of course, Mentor's DNA is still based on concepts It's beyond doubt that I will focus on the independent development of the product lifecycle and it will continue, but I expect M & A to play an increasingly important role in our future growth.
Mergers and acquisitions may face a series of problems, such as corporate culture and technology integration, etc. Mentor how to solve these problems?
Cultural integration is almost always one of the major challenges that accompany M & A. It is important that both companies have similar business ethics, respect individuals, be technologically savvy, and excel at transnational cultures. Fortunately, Mentor's basic operations The principle is in line with Siemens, and we will focus on the compatibility of these principles in the future, in some cases, we will give up the M & A opportunities if the matching degree is not high.
What are the complementary architectures that both parties will achieve with Mentor's acquisition of Siemens? In addition, what specific adjustments will be made? What are Siemens' plans for Mentor's IC business?
Siemens Completes Acquisition of Mentor on March 30, 2017. We have made a great effort to become familiar with each other and to understand each other's business.One of the reasons for our success in mergers and acquisitions is that Siemens PLM has extensive experience in M & A , And it will consciously reduce the change to the merged company Another reason is that unlike most semiconductor-related mergers and acquisitions (except for Softbank / ARM mergers and acquisitions), Siemens M & Mentor starting point is 'revenue synergies', rather than 'Cost synergies' - to accelerate growth rather than reduce costs.
The main issue that Mentor needs to address is how to capitalize on increased investment from Siemens to accelerate Mentor's growth.Silicon made it clear that the IC design business is a key part of Mentor and will become one of the key components of Siemens PLM in the future.Siemens plans to increase Investing to Expand Mentor Revenue and Innovation in IC Design As you mentioned, Siemens has also demonstrated that M & A can speed up our growth and capability in IC design.
As more and more machine system manufacturers begin to enter the field of IC design, EDA companies will usher in the opportunities?
As I emphasized in a speech more than a decade ago, the application of EDA technology developed specifically for IC and PCB design in complete system design will bring significant development opportunities for the EDA industry.Electronic devices are becoming the vehicles, aircraft , Trains and industrial equipment field more and more important competition focus.Engineered electronic devices in system design increasing complexity, is bound to require more and more use of EDA technology.In the next few years, EDA companies will increasingly pay attention to system design, And develop tools that automatically understand other system and machine design information.
Solido is another IC company acquired by Siemens after Mentor, a startup founded in 2005 that supplies software for change-aware design and feature extraction to semiconductor companies worldwide, and now has more than 40 Large companies use Solido's machine learning products in their production to enable them to design, validate and make products that are more competitive than ever before. Terms of the transaction are not disclosed. Solido has been in close cooperation with Mentor for the past five years Ravi Subramanian, vice president and general manager of IC Verification Solutions at Mentor Corp., described some of the acquisitions.
What did Siemens intend to do with the recent acquisition of Solido by Siemens and what could be done with Siemens and Mentor?
Mentor, a Siemens Business completed its acquisition of Solido Design Automation on December 1, 2017. Solido is now part of Mentor's Analog / Mixed Signal (AMS) Verification Business Unit and is responsible for delivering the world's leading Machine Learning-based Variation-aware Design And feature extraction software.
There is a huge synergy between Solido and Mentor, and from a business perspective Mentor will use its channel to deploy Solido products to a wider global customer base and to support a larger user base. There is a direct synergy between Solido's Variation Designer and ML Characterization Suite and Mentor's Analog FastSPICE (AFS), Eldo, the Simulated Feature Extraction Environment (ACE), and the Kronos Library feature extraction tool.Finally, In the meantime, Mentor will be using Solido's machine learning technology and expertise and its user experience expertise within its product portfolio and gradually into the broader Siemsns product portfolio.
One of Solido's strengths is machine learning.What do you think the impact of machine learning or artificial intelligence will have on EDA? What is the layout of Mentor in this regard? What are the future trends of EDA?
Machine learning is revolutionizing the EDA market by delivering disruptive product solutions that increase the performance of tools by orders of magnitude while maintaining the accuracy of results. Solido's machine learning skills and expertise have been developed and accumulated over 12 years The main reason contributing to the acquisition is that Solido has a portfolio of machine learning capabilities for engineering applications and is known for its performance improvements, resulting accuracy, and scalability for large EDA issues. Solido leverages these machine learning core technologies to subvert the variation Perceived design and feature extraction markets and will be aided by the broader Mentor and Siemens markets.