It is very difficult for EDA companies to complete the full process coverage on their own.

International Electronics Business News on the 15th At the recently held second collective performance briefing session on chip design on the Science and Technology Innovation Board in 2023, the heads of a number of listed chip companies expressed their optimism about the market conditions in 2024. Liu Zhihong, chairman of China's leading EDA company Guilun Electronics, said bluntly that the opportunity for mergers and acquisitions in the EDA industry may have arrived.

Liu Zhihong pointed out that in the entire semiconductor industry, EDA is an industry with a small market size but a long technical process, which requires a wide variety of software and hardware tools to cooperate with each other to form a tool chain. Based on the above-mentioned industry characteristics, it is very difficult for EDA companies to complete full-process coverage on their own.

Judging from the development history of international EDA giants, they all use core EDA products that are extremely competitive in the international market as anchors, and have consolidated the technological leadership of their core products through decades of continuous high R&D investment. And through continuous expansion, mergers and acquisitions, it has finally been fully recognized and used by the world's leading integrated circuit companies, establishing its existing market position.

In Liu Zhihong's view, the current demands of domestic end customers for EDA tools have been adjusted from simple substitution in the early days to the value of the product itself, reflected in the demand for more advanced, efficient, and reliable EDA tools. The expectations of society and capital for enterprises have also changed. Whether there are breakthroughs in R&D will be adjusted to the healthy and independent development of the company, which is reflected in the requirements for sustained and large-scale revenue growth.

"The industry needs companies that have sufficient technical strength, can realize product implementation, can create an industrial ecology, and have strong integration capabilities. Through the concentration of resources, talents, and capital, they can truly achieve breakthroughs from point to point and become globally competitive. industry leader to enhance the overall competitiveness of the domestic EDA industry," he said.

Liu Zhihong emphasized that based on the current industry development and capital market situation, the opportunity for mergers and acquisitions in the EDA industry may have arrived. Bolan Electronics is also seizing the current window period to actively carry out layout and seek suitable targets in the market to negotiate.

At the same time, the merger and integration of the industry is a systematic project that requires policy guidance from relevant industry authorities and policy support from the listing regulatory authorities. We also hope that the merger and integration in the industry can be implemented as soon as possible. Liu Zhihong said that the company will promptly disclose information in accordance with relevant regulatory rules.

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