(Reuters) - Synopsys (NASDAQ:SNPS) on Wednesday named 25-year-veteran Sassine Ghazi as its CEO and president, and forecast better-than-expected fourth-quarter results as artificial intelligence (AI) innovations fuel demand for custom semiconductor design.
The chip design software company said Ghazi, who brings with him decades of chip design and applications engineering experience, will succeed Aart de Geus next January. Geus, co-founder of Synopsys, will move to executive chair's role.
Investors are likely to be comfortable and confident in the appointment of Sassine who helped Synopsys to be a faster-growing and more profitable company in recent years, said Baird Equity Research.
Demand for the software used to design chips has risen as technology giants such as Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) rush to create their own semiconductors needed for AI processing.
Intel (NASDAQ:INTC) and Synopsys on Monday announced a deal - an important step for Intel's contract manufacturing business as it strives to become a viable alternative to Taiwan Semiconductor Manufacturing Co or Samsung Electronics (KS:005930) Co.
Synopsys on Wednesday forecast fourth-quarter adjusted earnings per share of $3.01 to $3.06, above analysts' average estimate of $2.91, according to Refinitiv data.
Revenue expectations of $1.57 billion to $1.60 billion were also better than analysts' average estimate of $1.57 billion.
Shares of the chip design software firm were up 2.3% in extended trading.
The company reported revenue of $1.49 billion in the third quarter ended July 31, above estimate of $1.48 billion. Adjusted profit per share of $2.88 also beat estimates of $2.74.
Revenue from its Design Automation unit jumped about 23% to $1 billion.It is the company's largest segment, which includes digital and custom integrated circuit (IC) design software among other products and services.
(This story has been corrected to change the name of the executive in paragraph 2)