In sync with its strategy of growing through acquisitions Synopsys Inc. SNPS recently announced the completion of the buyout of a privately-held self-funded company, QuantumWise. The company largely works on delivering software tools for atomic-scale modeling of materials. However, the financial terms of the deal have been kept under wraps.
Headquartered in Copenhagen, Denmark, QuantumWise tools and solutions reduces time-to-marketand cost by enabling co-optimization of materials, processes, devices, and circuits across many applications, including semiconductors and electronics. The integration of QuantumWise with Synopsys' Sentaurus TCAD will aid Synopsys better in managing simulation tasks and analyzing simulation results
The acquisition is expected to strengthen its position in the TCAD business. By using QuantumWise's solutions, the company will be able to create a higher-quality initial Process Design Kits (PDKs) for Design-Technology Co-Optimization (DTCO). In short, the acquisition will enhance its technical efficiency along with augmenting product and service portfolio.
According to Synopsys, "The QuantumWise technology is a key component of our DTCO solution as it enables the systematic evaluation of new materials by providing TCAD models in the very early stages of technology research before wafers are available." Consequently, the acquisition will help Synopsys to reduce the costly and time-consuming test wafer runs when evolving a new semiconductor device or technology.
Furthermore, through the acquisition, Synopsys will gain QuantumWise’s customers thereby boosting the top line.
Notably, in the year-to-date period, the stock has outperformed the industry to which it belongs to. Synopsys has returned 36.7%, while the industry gained 25.5%.
Acquisitions are central to the company’s growth strategy and give it access to newer markets and technologies. Some of its notable buyouts include Cigital, Codiscope, Codenomicon, Coverity and Target Compiler Technologies.
However, competition from Cadence Design Systems Inc. CDNS and Mentor Graphics Corp., a challenging technology spending environment and uncertainty regarding the exact time of realizing acquisition synergies keep us on the side-lines.
Currently, Synopsys carries a Zacks Rank #2 (Buy). Some other top-ranked stocks worth considering are Applied Materials, Inc. AMAT and NVIDIA Corporation NVDA, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected EPS growth rate for Applied Materials and NVIDIA is 17.1% and10.3%, respectively.
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