Risks of Renesas Electronics' Acquisition of Altium: A Comprehensive Analysis

Recently, the acquisition of Altium by Renesas Electronics has been making headlines. This move has significant implications for the PCB design software industry and the electronics manufacturing sector. In this article, we will explore the potential risks and benefits of this acquisition, focusing on the strategic implications for both Renesas and Altium users.

Potential Benefits for Renesas Electronics

One of the most significant benefits Renesas Electronics could derive from acquiring Altium is the potential for improved customer integration. Renesas has a vast portfolio of semiconductor products that are extensively used in various industries. By integrating Altium, a leading PCB design software, Renesas can offer a seamless design experience to its customers, potentially increasing the demand for its components.

Zero Cost Access

In the best-case scenario, Renesas could reduce the cost of using Altium to zero, similar to how Analog Devices kept LTSpice free. This move would be highly beneficial for users and could significantly boost Renesas' market share. By making Altium freely available, Renesas could:

Encourage a wider user base to adopt its products Enhance the integration of Renesas electronics into various designs Potentially increase sales of other Renesas components and solutions

Platform Investment and Expansion

Another strategic approach Renesas could pursue is to invest in the platform, making it more accessible and user-friendly. By increasing the user base and expanding the platform, Renesas can:

Increase engagement and user loyalty Streamline the design process for engineers and designers Promote the use of Renesas components across various industries

Potential Risks and Negative Outcomes

While the benefits are compelling, there are also several risks associated with the acquisition, which could negatively impact both Renesas and its users.

Siemens Model

One potential risk is that Renesas could follow in the footsteps of Siemens, which has sought to recoup its investment in Product Lifecycle Management (PLM) systems by increasing the monthly costs and premiumizing its tools. This strategy could result in:

Increased subscription costs for Altium users Potential alienation of existing users due to higher costs Migration to alternative software options

Short-Term Profit Maximization

Another risk is that Renesas might hold on to Altium for a few years, extracting as much profit as possible before allowing the tool to become obsolete. This approach could:

Result in prolonged uncertainty for existing Altium users Damage the reputation of Altium as a reliable and innovative tool Force users to migrate to alternative software solutions

Current State of Altium

Before delving into the risks, it is essential to consider the current state of Altium. Over the past 15 years, there have been several issues with the Altium tool, which have not significantly improved:

The cost of using Altium has increased substantially. The performance and capabilities of the software have not improved significantly. Core issues such as the inch-based measurement system and rounding errors persist. The user interface of the schematic part remains substandard.

While Renesas has the potential to revitalize this software and improve its performance, the current state of Altium is a significant concern.

Conclusion

The acquisition of Altium by Renesas Electronics represents a significant opportunity for both companies. To maximize the benefits, Renesas must focus on improving the software, making it more accessible to users, and enhancing the integration of its components. However, Renesas must also be mindful of the risks associated with an increased subscription cost or the potential to alienate existing users. By carefully considering these factors, Renesas can ensure a smooth transition and a prosperous future for both companies.