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Siemens’ Deal for Supplyframe Has Immediate ECAD Implications
MUNICH – As buyers worldwide scrambled for hard-to-find components amid rising order books, Siemens in May showed its hand: a $700 million deal to acquire Supplyframe. The acquisition, which is expected to close in the current quarter, gives the OEM a leg up in offering a comprehensive path for engineers and buyers to source and design-in parts with the benefit of real-time knowledge of use trends – and possible shortages.

But while Siemens ultimately plans to apply Supplyframe’s platform across a range of markets and domains, it first plans to tackle EDA integration, incorporating certain Supplyframe technologies into its PCB design flows. In doing so, Siemens said, it will offer its PCB designers real-time visibility into global supply chains and other functionalities, aiding everything from schematic design to factory floor manufacturing.

A.J. Incorvaia, senior vice president of the Electronic Board Systems, Siemens Digital Industries Software (DIS), and Richard Barnett, chief marketing officer for Supplyframe, spoke about the planned integration with PCD&F/CIRCUITS ASSEMBLY in June.

As anyone who has looked up from their comic book knows by now, supply-chain matters are front and center. Therein lies much of Supplyframe’s value, the company says, because it helps customers mitigate inventory and related issues. Supplyframe was founded in 2003 to drive decision-making capability among product engineers and the rest of the sourcing and supply chain. Its founders came from the distribution side. “We have a unique business model because we help component suppliers and distributors transform their digital go-to-market and also help the end-customers, such as EMS and global OEMs, to drive greater intelligence in the decisions they are making, for strategic sourcing and supply chain,” Barnett said.

Supplyframe does this both through its internal component sourcing database and by scraping others. Component data, for instance, comes from IHS Markit, and parametric data from suppliers. “We have 180 APIs (application programming interfaces) with every major distributor globally for real-time data, and look at engineer component search data by industry and geography to get additional metadata,” Barnett said.

Through its acquisition of Mentor, Siemens has chip design and analysis, board design and analysis, manufacturing controls and throughput tools, such as digital twin software. The synergies in the latest deal, says Incorvaia, lie in helping companies understand the right productions, pricing, and so forth. And while the major EDA companies have historic partnerships with various third-party design content providers – and in some cases, have purchased those companies for themselves – the amalgamation of Siemens and Supplyframe has the potential to significantly expand that position.

AJ Incorvaia headshot
AJ Incorvaia
Richard Barnett headshot
Richard Barnett
“This has impacts on both the buy and sell side,” he said. “For component manufacturers, it ensures they provide their customers with the right parts at the right time, and it helps the design side ensure they are optimizing their bills of materials.”

He noted Siemens is already using Supplyframe’s technology with Siemens’ circuit board design tools to provide customers with information to streamline the product development cycle.

Supplyframe claims access to some 10 million engineers worldwide. The existing Supplyframe customer relationship agreements are not expected to constrain the ability of Siemens to market its other tools directly to those prospects. Still, notes Incorvaia, Siemens’ HyperLynx and Valor tools already work in third-party flows. “We won’t want to be only in those internal flows … customers are going to mix and match various tools and Supplyframe fits very nicely.”

Siemens is already at work embedding Supplyframe’s component data into its Xpedition and Pads Pro ECAD as a plug-in. That data include real-time access to pricing, availability, compliance and lifecycle directly accessible from schematic capture or layout, plus links to component supplier datasheets.

“That gives designers the ability as they are creating the schematic to assess the risks of that part, the pricing, the availability,” said Incorvaia. “As you saw with Siemens’ NX and TeamCenter integrations, we will have as much of that tech as we can bring to an engineers’ fingertips, so they can make use of it in their own design environment without leaving that design environment. Users won’t need to learn a new UI.

“This integration is close to market, [and] we anticipate there will be a number of synergy projects” going forward, Incorvaia said. He added he thinks the deal will enhance Siemens’ existing relationship with Digikey.

Incorvaia deferred on the question of how much of a premium Siemens ECAD or Valor customers will pay for access to the Supplyframe data. He said Supplyframe will operate as a standalone business segment inside Siemens DIS, with chief executive Steve Flagg reporting to Siemens DIS CEO Tony Hemmelgarn. “We tend to keep acquisitions as standalone entities, although there will be a close tie to the existing companies. Like with Mentor, we keep the business segments the same,” he explained.

It appears Siemens is pushing toward an all-in-one software solution. One question, then, is this: Is that what customers want? Or will there be market pushback because certain customers don’t want to be overly dependent on any single supplier? Incorvaia believes product development has grown so complex, it screams for a finely-tuned integrated solution.

“What we are finding is the problems are getting so large, as customers go through this digital transformation, where they have to worry about product complexity and ensure the software they have is the latest version and works with the other latest versions, making sure they can acquire the parts they need and move seamlessly into manufacturing. These problems are becoming so large, customers are looking for a partner that can help them uniquely solve their problems. Sometimes customers have manufacturing that’s in-house; sometimes it’s external; sometimes there are specific regulatory requirements they can meet …. They want a partner that can help them through the entire development process, not just the electronics. They have to worry about the mechanical, lifecycle, and electronics early on when spec’ing the product that the architecture can last, and they are meeting the initial requirements. They are looking for a vendor that can help them solve that entire problem. We see customers coming to us looking for a partner, versus looking to build a flow of best-in-class tools.”

“We see the same patterns,” Barnett added. “There’s really a shift in leadership with these people who experienced the global chip shortage, who are looking for ways to drive greater intelligence to mitigate the impact to a longer-term root cause. It’s challenging for a lot of these organizations.”

Can we reach the point where component analysis might be shared company to company, even anonymously? Barnett thinks it depends on how component analysis is defined, but adds that third-party validation is already how peer communities are learning and testing their design strategies. “Leading component suppliers are trying to engage design engineers with the right content at the right time. Also, sharing the supply market context for component parts and tracing the digital twin from design through manufacturing is now a critical dimension of key part selection decisions such as, ‘How do I design in alternate suppliers or components, so I am empowering my CM to work within that BoM and adjust to supply market conditions?’ Those are the things we think about when we try to tie component design and use.”

Both sides point to potential to expand well beyond electronics into areas both larger (mechanical) and faster-growing (additive). “We feel that the Supplyframe technology can help Siemens with our marketplace strategy. We believe that in the future the infrastructure and technology that Supplyframe has can be used in other areas, for example, mechanical design and additive manufacturing,” Incorvaia said.

“We ask, ‘How do you derive greater intelligence from design to sourcing?’ ” said Barnett. “And on a global basis, we consider the context of new design cycles, and develop SaaS solutions for component suppliers and distributors on the sell side and sourcing agents on the buy side. Our Direct-to-Source Intelligence network includes lots of different properties in different areas. Moving into mechanical is even bigger than just EDA.” (MB)