You should NOT expect a quick reply

Together Zemax and CodeV must have at least 90% market share.  Seems like an anti-competitive situation that the FTC might be interested in?  I wonder if NASA, or the big defense contractors, or the semi industry, will complain to the FTC about this. These codes are critical to their business.  

There is so much to digest here.  Both ANSYS and Synopsis have SW portfolios that contain hundreds of items.  The few optics related SW programs we are talking about number in the single digits.   The various public stmts and investor docs make clear that the emphasis is on the “monster markets” involved with silicon design and all the connective SW programs that enable systems design of products.   We in optics, are a still bit of a niche SW product.   Let’s see what the future brings.   

Those familiar with NASTRAN will recall that it has a complex history (see link).  With the impact that FEA has on government operations (e.g. military, construction, transportation, energy, ...), the near monopoly that MSC NASTRAN had on simulation caused the code to be disseminated to a competitor - hence the rise of NX NASTRAN vs. MSC NASTRAN near the turn of the century.

It is pretty clear that the market for optical simulation is much smaller than FEA for mechanical analysis. 

• Size of Optical Simulation market:  approx. $170 M (link)
• Size of FEA market:  approx. $3.0 B (link)

Nonetheless, this acquisition should catch the eye of the DoD and the DOE.  However, I have no idea what they’ll actually do about the situation.

What the transfers of RSoft / CodeV to Synopsis and Lumerical / Zemax to (eventually) Ansys demonstrated to me is that the software simulation business looks similar to the optics manufacturing business.  When a single person starts a software company, they eventually liquidate and sell it to a big company so they can retire.

I’ll admit there are differences, like you can’t grow an optics software business to the size of a major optics manufacturer and the overall market is much smaller for software than “glass”.  However, the principle remains the same.  After working for over 100 companies in my lifetime, very few are sustained as family businesses.  Most are turned over as acquisitions.

I can’t recall the last merger that has resulted in better service / price / performance for the customer.  While I’ve heard the promises that a bigger company results in more great people working on better features, in practice I don’t see a lot of revolutionary improvements from acquisitions.
If I were at either Ansys or Synopsis and I was in optical simulation (ray tracing, diffraction, or wave optics), I’d be concerned about my job.  Since it is not easy to run these software businesses as separate companies (that’s why they were acquired), then there is likely duplication in the workforce. 

Be prepared for prices to go up and layoffs.

I noticed an announcement yesterday that Synopsys will sell its optical division to Keysight as part of the Ansys acquisition. 
 

Keysight to acquire optical design division from Synopsys

I read the article and I am not clear. Does this mean that they will acquire Zemax and sell Code V, or that they will sell both Zemax and Code V to Keysight? Obviously, I hope that it is the former!

Best Regards

John

Synopsys will sell LightTools, CodeV and RSoft to Keysight.  Then the DOJ will let Synopsis acquire all of Ansys, which includes Zemax, Lumerical, and Speos. I suspect that the DOD said it was a big no-no to let the optical design software end up in a monopoly. 

What they're likely after is Ansys multi-physics simulations for the semiconductor industry. In particular for packaging modeling. Which is booming right now with the AI startups sprouting like weeds in silicon valley.  So the optics software was likely never the focus of the acquisition.