Renesas acquires Altium as part of its digitalization strategy

March 21, 2024

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Renesas acquires Altium as part of its digitalization strategy.

Renesas Electronics has been transitioning towards developing tools and software to support the entire electronic aspect of physical design processes. In the previous year, the company introduced Quick-Connect Studio, a new cloud-based version of its IoT system design platform, facilitating the build of both hardware and software for prototyping and product development.

To further expand its design and software offerings, Renesas has undertaken a strategic move to acquire Altium Limited for $5.9 billion¹. This acquisition is aimed at enhancing its capabilities in digital device design and supporting its digital transformation. This move propels Renesas to become a comprehensive solutions provider rather than just a chip vendor, strengthening its position in the competitive landscape.

Renesas says that integrating Altium’s advanced design capabilities with its embedded solutions will create an integrated and open electronics system design subsystem. This is expected to expand their market presence and drive growth by offering software services to new segments of customers.

“The addition of Altium will enable us to deliver an integrated and open development platform, making it easier for businesses of all sizes and industries to build and scale their systems. We look forward to working with Altium’s talented team as we continue to invest and drive our combined platform to the next level of value for our customers,” says Hidetoshi Shibata, CEO of Renesas.

Figure 1: The growth of Altium (Source: Renesas Webinar). — Figure 1: The growth of Altium (Source: Renesas Webinar)

The acquisition is an all-cash transaction with an equity value of approximately $5.9 million. In the webinar, Shibata emphasizes the significant growth of Altium when compared to its competitors, noting that Altium has achieved a CAGR of 19 percent year on year and a revenue of $263 million for the fiscal year 2023. Additionally, the company has sustained a robust EBITDA margin of 36.5 percent in the same fiscal year.

Shibata further explains that the acquisition extends beyond Altium’s current offerings, highlighting a collaborative effort to build new software solutions addressing the challenges of the electronic industry. The goal would be to integrate MCAD and ECAD, facilitating companies to operate efficiently on a unified platform.

“I strongly believe that electronics is the single most critical industry to building a smart and sustainable world. Having worked closely with Renesas as a partner for nearly two years, we are excited to be part of the Renesas team as we continue to successfully execute and grow,” says Aram Mirkazemi, CEO of Altium.

In July 2023, Renesas standardized its PCB design processes using the Altium 365 cloud-based platform. This deepened its collaboration, with Renesas committing to publish the ECAD libraries of all its products on the Altium public vault. This allowed Altium’s customers to select Renesas components from the Altium library directly.

Altium: More than a PCB design software

Over the past 40 years, Altium has been innovating in the electronic design industry, focusing on the layout of the electronics on PCBs. With the release of Altium Design, the company broadened its capabilities by integrating various aspects of electronic design–from PCBs to FPGAs and embedded software development–into a single application. To improve its PCB design and 3D visualization capabilities, Altium has acquired several companies.

In 2018, Altium took a significant step by acquiring Brooklyn-based PCB:NG, an online service for turnkey PCB assembly that introduced instantaneous Design for Manufacturability (DFM) checks for orders that vary in volume and complexity.

This acquisition allows Altium to bring PCB assembly capabilities in-house, bridging the gap between design and manufacturing. The aim was to streamline the electronic design process by unifying component selection, evaluation, simulation, and PCB physical design at a system level.

Figure 2: PCB layout in Altium Designer (Source: Altium Limited). — Figure 2: PCB layout in Altium Designer (Source: Altium Limited)

Altium has continuously adapted, aligning its offerings with the advancements in the electronic industry, particularly in PCB design. The company has expanded its software suits to include Altium Designer for PCB design, CircuitStudio for both entry-level and professional PCB design needs, and CircuitMaker, which offers free PCB design tools for makers and open-source projects.

In 2017, Altium further enhanced its ecosystem by acquiring Octopart, a company specializing in the aggregation of electronic part data and sourcing. This aimed to simplify how engineers access and utilize electronic part information, making the design process more streamlined.

Renesas views the acquisition of Altium as an opportunity to leverage Altium’s digital expertise, backed by a team of over 850 experts skilled in cloud and software technologies. This move is in line with Renesas’ objective of advancing digitalization through the expansion of its software solutions portfolio for system design and lifecycle management.

”Development processes continue to evolve and accelerate. With our Purpose “To Make Our Lives Easier” in mind, our vision is to make electronics design accessible to the broader market to allow more innovation through a cloud-based platform,” Shibata concludes.