Rational convergence of investment, financing and mergers and acquisitions of domestic enterprises

The investment, financing and M&A activities of the domestic EDA industry are different from the active M&A in the international market. Although the number of domestic EDA enterprises and financing cases have increased rapidly in recent years, with the maturity of the industry, investment and financing activities have gradually shown a trend of rational convergence.

850-E-P5-NN-S5-H-N-N-A-L-A-G-A-S-F-C-SE-N-W-B-N-2 According to incomplete statistics, from 2022 to March 2024, more than 20 investment, financing and mergers and acquisitions occurred in the domestic EDA industry, involving more than 16 enterprises, highlighting the heat and capital attention of the industry. For example:

In September 2022, Chihuazhang announced the acquisition of Cuenyao Electronics and the integration of core technologies, integrating its ultra-large scale software simulation technology into the CHIhuazhang Intelligent V verification platform to enrich its system-level verification product portfolio. In October of the same year, Huada Jiutian acquired 100% of Xinda Technology for $10 million in cash, which is engaged in the development of memory /IP feature extraction tools. Then on December 26, Siercore acquired Guowei Jingrui, and integrated its hardware simulation into the digital EDA full process layout.

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It is also worth noting that in May 2023, Gaolun Electronics acquired 100% of the equity of Fuzhou Core Zhilian Technology Co., LTD., making up for the blank of the company’s product design at the board level and package level. In September of the same year, Guangli Micro acquired 62% of Yirui Chip, whose main business is integrated circuit design for Testability (DFT) technical services and product development.

On March 26, 2024, Yake Hongyu completed the second round of financing, co-invested by Focus hard technology track, Yuntai Capital, and Huada Jiutian followed. In the past few years, the company, which has only been established for four years, has also completed the investment and merger of several EDA startups, and has acquired wholly-owned subsidiaries including: Shanghai Huasang Electronics, Yunshu Innovation Software, and Beijing Nori Integrated Circuit.

850-E-P5-NN-S5-H-N-N-A-L-A-G-A-S-F-C-SE-N-W-B-N-2 Under this trend, although emerging enterprises can obtain more resources and support by accepting the acquisition or strategic investment of established enterprises, whether they can compete with other established enterprises depends on their own strength and strategy. Some emerging companies may have unique technologies, innovative products or services, and flexible market adaptability that enable them to stand out in a highly competitive market and compete with industry giants. However, for small scale or market position is not yet stable enterprises, in the face of the competitive pressure of industry giants, may face greater challenges, whether it is impossible to escape the fate of acquisition.

Nevertheless, this M&A activity is expected to continue, bringing more innovation and development opportunities to the industry. By integrating resources, technology and talent, companies in the industry can better respond to market challenges and promote the progress and development of the industry. This integration helps to create more competitive products and services, bringing more possibilities and opportunities to the industry.