About Synopsys, Inc.
Synopsys is a leading provider of electronic design automation (EDA) software and services used in the making of integrated circuits. Engineers creating advanced semiconductors, product teams developing advanced electronic systems, and software developers use the company's products to develop, simulate, and test the physical design of ICs before production, and then to test finished products for bugs and security vulnerabilities. The company also provides intellectual property (IP) products, or pre-designed circuits used as part of larger chips. Moving beyond silicon, Synopsys had added software testing to its portfolio. Customers come from a variety of industries, but particularly the semiconductor and electronics manufacturing as well as automotive and energy. About 80% of company's revenue comes from US customers.
Synopsys makes money from two business segments: Semiconductor & System Design segment and Software Integrity.
Its Semiconductor & System Design segment (around 90% of sales) includes the EDA, IP and System Integration. EDA software includes digital, custom and Field Programmable Gate Array (FPGA) IC design software, verification products and obligations to provide unspecified updates and support services. IP & System Integration includes its DesignWare IP portfolio and system-level products and services.
Software Integrity segment (about 10% of sales) provides a comprehensive solution for building integrity—security, quality and compliance testing—into its customers' software development lifecycle and supply chain. These testing tools, services, and programs enable its customers to manage open source license compliance and detect and remediate security vulnerabilities and defects across their entire software development lifecycle. Its offerings include security and quality testing products, managed services, programs and professional services, and training.
California- based Synopsys has around 120 offices around the world with more than 30 offices in the US. Its international headquarters is in Dublin, Ireland, and it has offices in about 30 countries, with major operations in Armenia, India, and China.
The US represents Synopsys' largest market, accounting for about 50% of revenue; the Asia/Pacific region, including Korea and China generates about 20% of revenue, followed by Europe for about 10%.
Sales and Marketing
Synopsys markets its products primarily to semiconductor and electronics systems companies through direct sales efforts in the US and in select international markets. The company typically distribute its software products and documentation to customers electronically, but provide physical media when requested by the customers.
Synopsys' sales have steadily increased over the past five years, growing almost 50% from 2016-2020. Synopsys has seen a steady climb in net income starting in 2017, where it took a dip by almost 50% from the previous year.
In 2020 (ended October), sales jumped by about 10% to $3.7 billion from $3.4 billion in 2019, driven by the continued business growth in all product categories especially on its IP & Systems Integration business. The increase in revenue primarily is attributable to the continued organic growth of the business in time-based and upfront IP license products, and higher maintenance and service revenue.
Net income has increased by more than 20% in 2020 compared to the previous year due primarily to the company's hedging activities. Total cost of revenue and operating expenses were $3.1 billion, an 8% increase from $2.8 in 2019, due to increases in the number of employees and restructuring.
Cash and cash equivalents increased by $507.1 million, ending the year with $1.2 billion from $728.6 million in 2019. Cash from operations contributed $991.3 million to the coffers, while investing activities used $360.4 million, mainly for acquisitions. Financing activities used another $140.6 million for repayment of debt and purchases of treasury stock.
Synopsys' growth strategy is based on maintaining and building on its leadership in its EDA products, expanding and proliferating its IP offerings, driving growth in the software security and quality market, and continuing to expand its product portfolio and its total addressable market.
Mergers and Acquisitions
In 2020, Synopsys acquired a certain assets from eSilicon. The acquisition expands Synopsys' DesignWare Embedded Memory IP portfolio with TCAMs and multi-port memory compilers, as well as its Interface IP portfolio with High-Bandwidth Interface (HBI) IP. The acquisition also adds a team of experienced R&D engineers to further scale Synopsys' IP development in the most advanced process technologies to address customers' evolving design requirements in growing markets such as AI and cloud.
Also in 2020, the company acquired Tinfoil Security, an innovative provider of dynamic application security testing (DAST) and Application Program Interface (API) security testing solutions, headquartered in Mountain View, California. The acquisition tightly aligns with the vision Synopsys began with when it established the Software Integrity Group over five years ago. Tinfoil's solutions will broaden what is already the most comprehensive portfolio in the market and will strengthen the Polaris Software Integrity Platform.
In 2020, Synopsys agreed to acquire the certain IP assets of INVECAS, headquartered in Santa Clara, California. This acquisition will broaden Synopsys' DesignWare Logic Library, General Purpose I/O, Embedded Memory, Interface and Analog IP portfolio. The acquisition will also add a team of experienced R&D engineers to accelerate Synopsys' physical IP roadmap across a range of process technologies to address customers' evolving design requirements in markets such as consumer, IoT and automotive. Financial terms were not disclosed.
Aart de Geus founded Optimal Solutions in 1986 with funding from General Electric, where he had been a manager in the company's Advanced Computer-Aided Engineering Group. The group built the prototype of a product that saved chip designers time by automating much of the design work.
In 1987 the company changed its name to Synopsys (an abbreviation of "synthesis and optimization systems") and moved to California. It went public in 1992, and two years later it introduced software that engineers used to design chips by function rather than structure.
As chips grew more complicated, Synopsys bolstered its product development efforts through acquisitions. The company has added other functions such as designing chip components that customers can use instead of designing their own and software testing.
690 E Middlefield Rd
Mountain View, CA 94043-4033
Phone: 1 (650) 584-5000
Employer Type: Publicly Owned
Stock Symbol: SNPS
Stock Exchange: , NASDAQ
President and Co-CEO: Chi-Foon Chan
Chairman and Co-CEO: Aart J. de Geus
CFO: Trac Pham
Employees (This Location): 500
Employees (All Locations): 15,036
Mountain View, CA
El Segundo, CA
Mountain View, CA
San Diego, CA
San Francisco, CA
San Jose, CA
Hsinchu City, Taiwan
Taipei City, Taiwan
Frankfurt Am Main, Germany