A vendor of electronic design automation (“EDA”) software to the semiconductor and electronics industries, Synopsys Inc. (
This new product is a result of the R&D collaboration between the two companies to develop a comprehensive design enabled solution for system-on-chip (SoC) integrated circuits (ICs) using the latter’s next-generation 20-nm process technology. This development process has been facilitated by ISDA (International Semiconductor Development Alliance) partners.
The tech majors have adopted a collaborative approach in several areas spanning standard-cell library refutability optimization, coding of complex routing, parasitic extraction and design rule checking (DRC).
A quality partner like STMicro helps in actively developing new technologies. Management at Synopsys believe that latest achievements in 20-nanometer design enablement show what companies can achieve through a collaborative approach. They expect this new 20-nanometer chip to make substantial progress in the tech world. The company intends to make further collaborations and strengthen its R&D presence in France.
This new product will enhance the company’s product portfolio and is expected to drive the company’s Intellectual Property business. Synopsys’ DesignWare IP was recently chosen by Freescale Semiconductor for Freescale's system-on-chip designs. Freescale Semiconductor specializes in automotive, consumer, industrial and networking markets.
This multi-year agreement gives the semiconductor company access to Synopsys' broad portfolio of DesignWare interface and analog IP such as USB, HDMI, PCI Express, SATA, and MIPI interfaces, as well as data converters, audio codecs and video front-ends. Synopsys' established technologies have aided in the development of products that are user friendly, innovative and offer good end-user experience, at a competitive price. This has increased their popularity amongst tech majors, leading to a sizable number of customer wins.
Product innovation remains a focal point for Synopsys. Recently, this electronic design automation, software and semiconductor company introduced Proteus LRC for lithography verification, bringing a radical change in the Lithographic verification process.
Although Synopsys is gaining traction through its new products, collaborations and acquisitions, we believe these will take some time to impact results. We believe Synopsys’ time-based license model has good visibility and its cash position is decent. However, the company is exposed to customer concentration as well as tough competition from peers like Salesforce.com (CRM), Cadence Design Systems Inc., Mentor Graphics Corporation and Magma Design Automation Inc. We believe that the relatively strong balance sheet will facilitate further acquisitions, which could help it gain market share.
The company currently has a Zacks #3 Rank (short-term Hold recommendation).
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