Activist investor Elliott Investment Management has a multibillion-dollar investment in Synopsys, the big chip-design software maker, according to people familiar with the matter.
Elliott plans to engage with Synopsys to push the business to make more money from its software and services, the people said. Synopsys’s customers include Intel, Alphabet and Tesla.
The details
Synopsys, based in California, has a market value of over $80 billion.
The company’s software and services are used to design electronic components for modern chips and help semiconductor, technology and artificial-intelligence companies ensure their hardware will work as intended.
“Synopsys is essential to the global chip industry,” Elliott Managing Partner Jesse Cohn told The Wall Street Journal. “As AI drives a step change in chip complexity and capital investment, Synopsys is uniquely positioned to benefit from this growth.”
Cohn said Elliott believes there is a “clear opportunity for Synopsys’ financial performance to more fully reflect the value it delivers.”
Cohn said the firm looks forward to engaging with the company, “to help align operational execution, profitability and monetization with its potential and importance to the semiconductor ecosystem.”
Other details around Elliott’s position couldn’t be learned. The activist often seeks operational and governance improvements.
Nvidia, a Synopsys customer, late last year said it bought $2 billion of the company’s stock. Nvidia Chief Executive Officer Jensen Huang said at an industry event earlier this month that the current AI boom should give Synopsys a boost.
“The number of Synopsys’ tool users [is] gonna go through the roof,” he said.
Commenting on Elliott’s stake, Synopys said that it regularly engages with its shareholders and values their input. It said that following its $35 billion deal in 2024 to acquire Ansys, “our opportunity and our product road map have never been stronger.”
The context
A global semiconductor arms race is under way as major technology companies pour resources into designing AI chips. Global chip sales hit a record $792 billion last year and are expected to surpass $1 trillion in 2026, according to data from the Semiconductor Industry Association.
Synopsys’s deal for Ansys was intended to help it target more industries and address the rising complexity in chipmaking.
Big semiconductor companies such as Micron Technology and Arm have been able to capture more value and raise prices thanks to the uptick in activity. The momentum has been reflected in their rising stock prices.
But Synopsys has recently lagged behind both the broader semiconductor index and Cadence Design Systems, its closest rival. Synopsys’s shares are down more than 6% over the past 12 months, while the semiconductor index is up around 71%, and Cadence’s stock is up about 8% over the same period.
Source: msn