After steel and telecom it’s the time for merger and acquisition in technology firms.

Cadence Design Systems Inc., the largest maker of programs for creating semiconductors, made a $1.6 billion unsolicited bid for Mentor Graphics Corp. As per the Industry insight this bid is to add customers and lower costs as chip makers cut spending.

“A combined Cadence-Mentor will offer customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next-generation product development,” said Michael J. Fister, president and chief executive officer of Cadence.

Combining with Mentor will help Cadence trim operating expenses as growth in the chip industry slows, Fister said.

Cadence reported $1.07 billion in operating expenses last year, a 6 percent increase from the previous year.

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