Synopsys Inc. (SNPS) recently announced that its CustomSim solution for mixed-signal verification of high-performance multimedia system-on-chips (SoCs) has been selected by Amlogic, a leading fabless supplier of video, audio and image processing chips.
Using CustomSim and VCS, Amlogic saw a five fold improvement in verification throughput compared with competitive solutions, in turn reducing the typical SoC verification cycle from five days to 21 hours. The technology should therefore enable semiconductor companies to significantly reduce the time to market of SoCs.
Product innovation remains a focal point for Synopsys. Recently, this electronic design automation, software and semiconductor company introduced Proteus LRC for lithography verification.
The comprehensive lithographic verification module has process-window-aware checking features to identify locations in a design that are sensitive to process variations, thereby enabling corrective action prior to committing a design to manufacture.
The new technology will be used by Micron Technology Inc. (MU) and other semiconductor companies. This marks the continuation of new product adoption by the company’s clients. In 2010, Synopsys announced that SVTC Technologies deployed the company’s manufacturing tool suite.
Apart from product innovation, Synopsys’ time-based license revenue model showed solid momentum in the first quarter of 2011 with over 81% contribution to total revenue. Hence, given the predictability of its revenue model and its recent success, we believe that 2011 will be a good year the company. Consequently, we believe Synopsys will have to make constant efforts to find new avenues to outperform in the space.
We believe the success of Synopsys’ manufacturing solutions will boost licensing revenue through additional customer wins going forward. Therefore, we believe Synopsys will have to find new avenues to outperform in this space.
The first quarter 2011 guidance is encouraging. Although Synopsys is gaining traction from new products and acquisitions, we believe these will take some time to produce favorable results. Moreover, the company is also facing competition from Salesforce.com (CRM).
Synopsys currently has a Zacks #3 Rank (short-term Hold recommendation).
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