The Fair Trade Commission conditionally approved the merger of American software corporations Synopsys and Ansys. This decision is based on the premise that the two corporations will sell off some of their design assets, aiming to alleviate concerns over competition in the domestic semiconductor and electronics industry.
On the 20th, the Fair Trade Commission stated that after reviewing Synopsys's plan to acquire all shares of Ansys for approximately $35 billion (about 50 trillion won), it concluded that there was a possibility of hindering competition in the market.
This merger is noteworthy as it involves major corporations Synopsys and Ansys in the semiconductor, optics, and photonics design software market, which could impact domestic corporations such as Samsung Electronics, SK hynix, and LG Electronics.
The Fair Trade Commission listened to the opinions of 12 domestic corporations, including Samsung Electronics, SK hynix, LG Electronics, and LX Semicon, during the review process. The corporations expressed concern that if Synopsys and Ansys merged and increased their market dominance, the prices of essential design software might rise or supply conditions could worsen.
Not only in South Korea but also in overseas competition authorities in the European Union, the United Kingdom, and the United States closely examined the competition-limiting potential of this merger. Specifically, it judged that since Synopsys and Ansys hold high market shares in three markets—register transfer level power consumption analysis software, optical design software, and photonics design software—there is a high possibility that competitors could lose their footing post-merger.
Accordingly, the Fair Trade Commission imposed conditions requiring Synopsys and Ansys to divest their respective institutional sectors. Specifically, to alleviate concerns over competition in each market, they must sell off the entirety of the business sectors in question and take measures such as providing technical support for a certain period post-sale.
A representative from the Fair Trade Commission noted, "This corrective measure aims to protect competition in the essential software market for semiconductor chip and optical and photonics product design" and added, "It is significant for preventing harm to domestic semiconductor corporations such as Samsung Electronics and SK hynix in a changing industrial environment marked by the rise of artificial intelligence semiconductors and global supply chain reorganization."
In determining specific details of this corrective measure, the Fair Trade Commission utilized for the first time the 'submission of corrective measures for mergers' system introduced in August last year under the Fair Trade Act. This system allows parties to the merger to directly submit corrective measures to alleviate competitive concerns, which the Fair Trade Commission reviews before making a final decision. Based on the corrective measures submitted by Synopsys and Ansys, the Fair Trade Commission gathered opinions from competitors and customer corporations and finalized the asset divestment measures after making some modifications.
The Fair Trade Commission stated, "In the future, we will continue to monitor competition-limiting international mergers that affect domestic operators in the semiconductor chip market and beyond."