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:
global register transfer level power consumption analysis, which is used to check how much power a chip consumes and requires to function
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.
