Why is Altium Worth $5.9 Billion to Renesas?

Renesas Electronics has announced its intention to acquire electronic design automation software company Altium for a reported $5.9 billion USD.

Extended offerings

The Japanese chipmaker aims to extend its offerings into digital device design through Altium’s software for circuit board engineering and design.

Renesas, who makes chips for Toyota and Nissan, has worked closely with Altium for the past few years, standardizing PCB design and evaluation boards in the cloud-based Altium 365 platform, according to EDN.com.

Uniform tool

Renesas aimed to reduce design complexity and accelerate time to market by streamlining its reference design and product kits by using Altium’s uniform PCB design tool.

EDN’s Majeed Ahmad writes, “Eventually, Renesas figured that it needed to own a design platform that’s efficient and easier to use.”

Owning a design software platform fuels Renesas’s quest to become a solutions provider rather than just a chip vendor.

Altium’s history

Altium, headquartered in California and publicly listed in Australia, previously rejected a $3.9 billion takeover bid by Autodesk in 2021.

The acquisition, subject to shareholder and regulatory approval, is the latest chapter in Altium’s rich, nearly 40 year history.

Founded in 1985 in Tasmania Australia under the name Protel Systems, the company’s initial focus was tools for designing printed circuit boards. The startup’s first product, Protel PCB, debuted in 1987.

For designers, it unlocked the ability to layout PCB electronically, a significant advancement at the time. In 1991, Protel became publicly listed on the Australian Stock Exchange, providing capital to fuel its ambitious growth and development goals.

Changing the company name to Altium in 2001 reflected its broader vision beyond just PCB design.

Throughout the aughts, Altium released several groundbreaking offerings, including Altium Designer, which integrated all facets of electronics design from PCB to FPGA and embedded software development in a single application.

Altium has made several strategic acquisitions to bolster its advanced PCB design capabilities, 3D visualization tools, and embedded software development. The emphasis on innovation and user experience attracted a wider range of customers seeking comprehensive solutions.

Innovation and UX

By making its tools usable and accessible to designers at various skill levels, Altium has managed to grow its user base among both professional engineers and hobbyists.

Transitioning to a subscription-based model, investments in cloud and collaboration technology, and an emphasis on community building have also contributed to Altium’s steady growth.

During a news conference announcing the deal, Renesas CEO Hidetoshi Shibata said Altium will continue operating independently, according to a Bloomberg report.

“By teaming up with Altium, we can make the world of electronics easier, cheaper, and more accessible to a wider range of market participants,” he said.