Electronic design automation (EDA) software provider and IP service provider Synopsys Inc. (SNPS: 21.385 -0.375 -1.72%) announced that SVTC Technologies will deploy the company’s manufacturing tool suite.San Jose, California-based technology provider SVTC Technology is a spin-off of Cypress Semiconductor Corp. (CY: 10.83 -0.28 -2.52%) and mainly focuses on emerging sectors like novel technology, biotechnology, image sensors and photovoltaic.
With the help of Synopsys’ upgraded manufacturing solutions, SVTC’s customers can market the product in a short span of time. Implementing nanotechnologies (based on semiconductor platforms) like CMOS processes, MEMS, novel technology and photovoltaic, processing time for making a product and its availability in the market can be reduced to a greater extent.
Synopsys’ manufacturing solutions will provide SVTC’s customers with cost-effective methods and improved designs to build new products, in relatively less time.
We believe the success of Synopsys’ manufacturing solutions will boost licensing revenue through additional customer wins going forward.
Apart from this, we are encouraged by Synopsys’ effort to enhance its technical efficiency and augment its product and service portfolio. The recent acquisition of Synfora Inc. and Virage Logic Corporation will enhance its comprehensive set of software offerings, thereby helping Synopsys gain broader customer access.
Although Synopsys is gaining traction from new products, recent acquisitions, new EDA partnerships and broad customer base, we believe these will take some time to produce favorable results.
We believe Synopsys’ time-based license model has good visibility and consider its cash position as decent. Additionally, the semiconductor industry is stabilizing and demand is picking up. However, we harbor some concerns on Synopsys due to its customer concentration risks and integration related risks.
| Analysts' Recommendation: | Strong Buy | ||||||||
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