The Competition and Markets Authority (CMA) is currently reviewing Synopsys' proposed acquisition of Ansys for $35 billion, which could impact competition in the UK’s semiconductor chip design and light simulation software sectors. The CMA has identified that the merger may reduce customer choice and lead to higher prices, lower quality software, and diminished innovation.

During its Phase 1 investigation, the CMA analyzed the competitive landscape of the semiconductor chip design and light simulation software markets. It found that while Synopsys and Ansys offer complementary products, there are three specific software areas where they compete closely, raising concerns about potential market dominance.

The specific areas of concern include global register transfer level power consumption analysis, which assesses chip power consumption, and global optics and photonics software used for designing light-related products. The CMA has given Synopsys and Ansys the opportunity to propose solutions to alleviate these concerns; otherwise, the case will move to a more detailed Phase 2 investigation.

Naomi Burgoyne, Senior Director of Mergers at the CMA, emphasized the importance of these software products for millions of UK businesses and consumers, highlighting the potential negative impact on innovation and pricing if the merger proceeds without addressing the CMA's concerns.