Synopsys lifts annual forecast on AI boom driving demand for chip design software
22/05/2024 23:08
By Stephen Nellis and Jaspreet Singh
May 22 (Reuters) - Synopsys SNPS.O raised its annual
revenue and profit forecast on Wednesday in anticipation of
robust demand for its software to design advanced chips driving
artificial intelligence applications.
The AI-boom has boosted investments in custom design of
chips as tech firms are racing to dominate the lucrative
technology with new innovations, triggering demand for companies
such as Synopsys.
Chief Executive Sassine Ghazi said demand for the company's
core products remained strong, with revenue from them expected
to grow 15% this year as customers design their own chips for AI
and other purposes.
Semiconductor firms continue to invest in research and
design and turn to the company's AI-powered electronic design
automation suite, Synopsys.ai, in a bid to ace and improve
complex chip designs.
The company raised its annual revenue forecast in a range of
$6.09 billion to $6.15 billion, compared with its prior
expectations of $6.06 billion to $6.12 billion.
It now expects annual adjusted earnings per share between
$12.90 and $12.98 from its earlier forecast of $12.86 and
$12.94.
Synopsys updated its annual expectations on its investor day
in March, excluding its software integrity (SIG) unit.
Earlier this month, the company said it would sell the SIG
unit to a private-equity group led by Clearlake Capital and
Francisco Partners in a $2.1 billion deal.
Synopsys forecast third-quarter revenue between $1.51
billion and $1.54 billion, below analysts' average estimate of
$1.60 billion, according to LSEG data.
Revenue in the second-quarter ended April 30 rose about 15%
to $1.45 billion, but fell short of estimates of $1.53 billion.
Excluding items, it earned $3.00 per share, beating estimates of
$2.95 per share.
In January, Synopsys, which partners with chipmakers
including Taiwan Semiconductor Manufacturing Co 2330.TW , Intel
INTC.O , and Samsung Electronics 005930.KS , said it would buy
Ansys ANSS.O in a $35 billion cash-and-stock deal.
Separately, Ansys said on Wednesday that its stockholders
approved its proposed acquisition by Synopsys.
Last week, Synopsys revealed in a filing that it received a
notice from China's State Administration for Market Regulation,
asking it to report its planned acquisition of Ansys.
Ghazi told Reuters that the deal falls below a threshold for
notification to Chinese regulators, but those regulators have
asked the company for its cooperation in examining the deal.
"At this stage we are in a assessment phase in terms of
understanding from them why and what are the next steps we need
to take," Ghazi told Reuters.
(Reporting by Jaspreet Singh in Bengaluru and Stephen Nellis in
San Francisco; Editing by Shailesh Kuber)
((Jaspreet.Singh@thomsonreuters.com; https://twitter.com/i_jass;))