Synopsys and TSMC enhance AI chip design

SUNNYVALE, Calif. - Synopsys Inc. (NASDAQ:SNPS), a technology leader with impressive gross profit margins of 81.35% and annual revenue exceeding $6 billion, has announced a deepened collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) to advance AI chip design and 3D multi-die innovation through certified electronic design automation (EDA) and intellectual property (IP) solutions. According to InvestingPro analysis, the company maintains a strong financial health score of 2.7 (GOOD), positioning it well for continued innovation investments. This partnership focuses on optimizing performance for TSMC’s advanced processes, including the A16™ and N2P, and developing EDA flows for the upcoming A14 process.

The collaboration has led to the certification of Synopsys’ digital and analog design flows on TSMC’s A16™ and N2P processes, aimed at enhancing design productivity and optimizing performance. The Synopsys 3DIC Compiler, now certified for TSMC’s CoWoS® technology, supports 5.5x reticle size packages to facilitate the integration of 3D stacked dies, crucial for next-generation high-performance computing (HPC) and AI applications.

Synopsys’ suite of tools, including the IC Validator™ for physical verification and the Fusion Compiler™ enhanced with frequency optimization and intelligent legalization technology, are geared towards achieving high-quality results and reducing time to market for complex system-on-chip (SoC) designs.

Furthermore, the partnership extends to the certification of IC Validator’s 3DIC solution for the 3Dblox standard, which aids in the design of ultra-high-density 3D stacking. This initiative is complemented by Synopsys’ comprehensive IP solutions on TSMC’s N2/N2P processes, providing designers with low-power, high-performance options for advanced HPC, edge, and automotive chips.

The collaboration between Synopsys and TSMC also includes efforts to support the adoption of 3D integration technologies, which are becoming increasingly important for meeting the performance requirements of next-generation chips. With revenue growth of 8.51% in the last twelve months and a robust current ratio of 2.68, Synopsys demonstrates the financial strength to support these technological advances. InvestingPro subscribers can access 15+ additional key insights about Synopsys’s financial performance and growth prospects.

Synopsys’ broad IP portfolio, including Interface and Foundation IP solutions, has been adopted by multiple customers and supports leading-edge standards like HBM4, 1.6T Ethernet, PCIe 7.0, and UCIe, aiming to facilitate first-pass silicon success and reduce integration risks.

The announcement was made in conjunction with the TSMC Tech Symposium Forum, where Synopsys is showcasing its solutions. The ongoing partnership between Synopsys and TSMC underscores their commitment to driving semiconductor innovation and supporting the design of increasingly complex and powerful electronic devices.

This news is based on a press release statement from Synopsys, Inc. The company’s strong market position is reflected in its financial metrics, with analysts forecasting continued profitability and 11% revenue growth for FY2025. For detailed analysis and comprehensive insights into Synopsys’s valuation and growth potential, investors can access the full Pro Research Report available exclusively on InvestingPro, which provides in-depth analysis of this and 1,400+ other top US stocks.

In other recent news, Synopsys has reported several significant developments. The company announced that its proposed $35 billion acquisition of Ansys has received clearance from the UK Competition and Markets Authority, contingent on certain divestitures. This acquisition is anticipated to enhance Synopsys’ AI-powered design solutions, although it still requires regulatory approvals from other jurisdictions. Additionally, Synopsys revealed a collaboration with NVIDIA to accelerate chip design speeds by up to 30 times using the NVIDIA Grace Blackwell platform, marking a substantial advancement in electronic design automation.

KeyBanc Capital Markets has revised its price target for Synopsys to $555, maintaining an Overweight rating, citing a broader pullback in software valuations. Meanwhile, Stifel analysts have reaffirmed a Buy rating with a $620 price target, highlighting Synopsys’ strategic focus on AI applications in design processes. The company also introduced AgentEngineer, a new AI-powered design tool aimed at streamlining complex design processes. These developments reflect Synopsys’ ongoing efforts to innovate and expand its capabilities in a rapidly evolving industry landscape.

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