SUNNYVALE, Calif. - Synopsys Inc . (NASDAQ:SNPS) has announced a collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) to deliver advanced Electronic Design Automation (EDA) and Intellectual Property (IP) solutions. These innovations are aimed at boosting compute performance and engineering productivity for AI and multi-die chip designs using TSMC's N2 and A16 processes.
The partnership, which builds on decades of joint efforts, focuses on AI-driven EDA flows powered by Synopsys.ai. This suite is designed to improve quality of results and speed up the migration to new design nodes for industry leaders. Synopsys is also developing new backside power delivery capabilities for TSMC's A16 process to enhance power distribution and system performance.
Together with Ansys (NASDAQ:ANSS), Synopsys and TSMC have introduced a multi-physics flow supporting CoWoS interposer packaging. This addresses thermal and power integrity challenges in multi-die designs. Moreover, Synopsys' 3DSO.ai system offers AI-driven analysis for maximum results, supporting TSMC's 3DFabric technology.
The collaboration has led to the development of 40G UCIe, HBM4, and 3DIO IP on TSMC's advanced nodes, optimizing latency, power, performance, and area for next-generation semiconductor designs.
Industry leaders have already adopted Synopsys' AI-driven EDA flows for their advanced chip designs on N2. MediaTek's Corporate VP, Ching San Wu, highlighted the performance and productivity gains enabled by Synopsys' Custom Compiler and PrimeSim solutions, which facilitate the design migration and optimization process for their System-on-Chips (SoCs).
To further support design efficiency, Synopsys and TSMC have enabled cloud-based EDA tools through TSMC's Cloud Certification. This allows mutual customers to access cloud-ready EDA tools that integrate seamlessly with TSMC's advanced process technology.
Addressing the multi-physics challenges of multi-die architectures, Synopsys, Ansys, and TSMC have developed a comprehensive system analysis flow. This collaboration aims to achieve golden signoff accuracy for chip, package, and system-level effects within the Synopsys design environment on TSMC technologies.
Synopsys has also taped out a test chip utilizing TSMC's CoWoS interposer technology, which includes support for test, monitor, debug, and repair capabilities, ensuring multi-die package health during manufacturing and in-field operations.
This collaboration is set to propel AI and multi-die chip design innovation, as stated in the press release statement.
In other recent news, Keysight Technologies (NYSE:KEYS) announced its intention to acquire Synopsys, Inc.'s Optical Solutions Group. This move is expected to strengthen Keysight's software portfolio with advanced optical system design and simulation tools. The deal hinges on the successful completion of Synopsys' acquisition of Ansys, anticipated to close in the first half of 2025.
In other developments, Synopsys Inc. launched ImSym, an imaging system simulator platform aimed at enhancing the development process for imaging products. The platform allows for comprehensive simulation of the entire imaging chain, potentially boosting efficiency up to 60 times compared to traditional methods.
Synopsys also reported strong financial performance in the third quarter of 2024, with a 13% increase in revenue and a 27% growth in non-GAAP earnings per share (EPS), exceeding its targets. Deutsche Bank (ETR:DBKGn) maintained a Buy rating on Synopsys, attributing the strong performance to significant hardware sales and a 32% year-over-year rise in Intellectual Property (IP) revenue.
Griffin Securities maintained a strong Buy rating on Synopsys, citing continued momentum in the company's Design Automation sector. Synopsys' full-year guidance for 2024 anticipates revenue between $6.105 billion and $6.135 billion, and non-GAAP EPS ranging from $13.07 to $13.12. These are among the recent developments for Synopsys.
InvestingPro Insights
The strategic partnership between Synopsys Inc. and Taiwan Semiconductor Manufacturing Company (TSMC) leverages Synopsys' robust suite of Electronic Design Automation (EDA) tools and IP solutions, which are crucial for advancing AI and multi-die chip designs. As investors consider the implications of this collaboration on Synopsys' market position and financial performance, key metrics from InvestingPro provide valuable insights.
Synopsys has been recognized for its impressive gross profit margins, which stand at 80.5% for the last twelve months as of Q3 2024. This is indicative of the company's efficiency and its ability to retain a significant portion of its revenue after the cost of goods sold has been accounted for. Additionally, the company's revenue growth over the same period is notable, at 26.26%, reflecting the increasing demand for its EDA and IP solutions in the rapidly evolving semiconductor industry.
InvestingPro Tips highlight that Synopsys is trading at a high P/E ratio, currently at 51.79, which suggests that investors are willing to pay a premium for the company's earnings, expecting future growth. This is further substantiated by the fact that nine analysts have revised their earnings upwards for the upcoming period, signaling confidence in the company's performance trajectory.
Moreover, Synopsys is a prominent player in the Software industry, a status that could be further solidified by the latest developments with TSMC. The company's strategic initiatives are likely to enhance its competitive edge and could potentially impact its market valuation positively. Currently, the market cap of Synopsys stands at $78.2 billion, reflecting its significant stature in the market.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, providing a comprehensive look at Synopsys' financial health and market position. These tips can be accessed through the InvestingPro platform and may offer further guidance for those considering an investment in the company.
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