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Cadence Design to Acquire Hexagon’s Engineering Unit for $3.16 Billion

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Cadence Design Systems (CDNS.O) announced on Thursday that it will acquire the design and engineering (D&E) business of Sweden’s Hexagon AB (HEXAb.ST) for €2.7 billion ($3.16 billion). The U.S.-based chip design software leader will finance the deal with 70% cash and 30% in newly issued shares to Hexagon.

Cadence, whose clients include Nvidia and Qualcomm, is a global leader in electronic computer-aided design (ECAD) tools that underpin chip development and verification. By acquiring Hexagon’s D&E unit, which specializes in structural and multibody dynamics simulation, Cadence will expand into adjacent markets such as aerospace and automotive engineering.

Hexagon’s D&E division generated nearly €265 million in revenue in 2024 and employs over 1,100 people worldwide. Its customer roster includes industry heavyweights such as Volkswagen Group, BMW, and Lockheed Martin, providing Cadence with a stronger foothold in the automotive and aerospace sectors.

The deal builds on Cadence’s acquisition of BETA CAE Systems in 2024 for $1.24 billion, further strengthening its simulation and engineering software capabilities. The Hexagon transaction is expected to close in Q1 2026, subject to regulatory approval. Cadence has agreed to pay a reverse termination fee of up to €175 million if the deal falls through.

With this acquisition, Cadence is positioning itself as not only a key player in semiconductor design software but also as a broader engineering solutions provider, extending its reach beyond chips into high-performance industries reliant on advanced simulations.

South Korea Announces $34 Billion Fund to Support Strategic Industries

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South Korea has unveiled plans to establish a $34 billion policy fund aimed at providing financial support to companies operating in strategic sectors such as semiconductors and automotive manufacturing. The government’s decision is driven by escalating global competition and rising protectionist policies, particularly from the United States.

The state-run Korea Development Bank will manage the 50 trillion won fund, which will be distributed to firms in key industries over the next five years. The support will take the form of low-interest loans and investments. This initiative is part of South Korea’s broader strategy to strengthen its position in industries vital to its national economic security.

As the global landscape grows increasingly competitive, South Korea has identified 12 sectors as “national strategic technologies,” including semiconductors, future mobility, rechargeable batteries, biopharmaceuticals, aerospace, and artificial intelligence. These sectors will receive enhanced financial backing and protection to address challenges such as the fragmentation of global supply chains.

Additionally, the government’s semiconductor support package, introduced last year, will be incorporated into this new fund. In a bid to attract talent, South Korea also plans to offer “top-tier” visas and permanent residency to skilled foreign workers with experience in global firms, making it easier for them to join the country’s advanced technology sectors.

Qualcomm Forecasts Strong Q2, Shares Drop After Licensing Outlook

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Qualcomm exceeded analysts’ expectations for Q1 sales and adjusted profits but forecast a more tempered outlook for its patent licensing business, sending its stock price down 4.8% in after-hours trading. The company reported Q1 sales of $11.67 billion and adjusted earnings of $3.41 per share, significantly outperforming the expected $10.93 billion and $2.96 per share. For the upcoming fiscal second quarter, Qualcomm projected sales of $10.75 billion and adjusted profits of $2.80 per share, both surpassing analysts’ expectations.

However, the company warned that its patent licensing business, which generates revenue from companies paying royalties for 5G technology, would not see growth this year after a deal with Huawei expired. This news caused some investor concern, despite positive projections in Qualcomm’s chip business. Licensing revenue for Q2 is forecasted at $1.35 billion, below the $1.43 billion analysts anticipated.

The market’s response was mixed, with Qualcomm’s shares dropping by 4.8% after the announcement. Investors have been closely monitoring Qualcomm’s involvement in the AI and smartphone markets, and while the company continues to secure major deals, such as with Samsung and Microsoft, the uncertain future of its Huawei agreement looms large.

Despite the dip in licensing revenue expectations, Qualcomm’s position in the smartphone, automotive, and IoT markets continues to strengthen. The company reported strong handset revenue of $7.57 billion, up 13% from the previous year, and its automotive chip sales saw significant growth, reaching $961 million.