Synopsys’ (SNPS Quick QuoteSNPS - Free Report) shares have gained 22.6% in the year-to-date period compared with the Zacks Computer - Software industry’s growth of 21.9%. This growth reflects investors’ strong confidence in the company’s robust portfolio strength, which is driving its financial revenues.

 

Synopsys recently announced that its ARC HS4xFS Processor Intellectual Property (IP) chip has been awarded the ISO/SAE 21434 grade certification by Swiss-German testing, inspection and certifying organization, SGS-TÜV Saar.

 

The ISO/SAE 21434 standard assures customers that their vehicle qualifies for cybersecurity risk management throughout its lifecycle. The IP also meets ISO 26262 standards, making it safe for automotive applications.

 

The ARC HS4xFS Processor IP complies with Automotive Safety Integrity Level D Random and Systematic standard, giving it functional safety and hazard coverage that occurs over time. Moreover, these high-performance processors are designed for embedded applications that leave a small footprint due to their 32-bit superscalar architecture.

The necessity of compliance with all these certifications has become important in recent times as a growing number of automotive brands are rolling out software-defined vehicles. With a rising number of vehicles depending on software updates online, there’s a growing threat of cyber breaches, malware injection, or unauthorized access.

 

With all these certifications in place, the ARC HS4xFS Processor IP might see its adoption among original equipment manufacturers in the automotive space.

The global semiconductor IP market is likely to witness a CAGR 8.5% from 2024 to 2032, per a report by Global Market Insights. Companies like Cadence Design Systems (CDNS Quick QuoteCDNS - Free Report) , Arm Holdings (ARM Quick QuoteARM - Free Report) , Lattice Semiconductors, NVIDIA and Qualcomm operate in this market.

 

Bigger players like Cadence Design systems are acquiring other companies like Rambus to expand its capabilities in this growing market. Synopsys also acquired Intrinsic ID to advance in Physical Unclonable Function IP technology front. Like any other big semiconductor IP player, Arm Holdings is advancing its automotive IPs. Arm Holdings recently launched server-grade automotive enhanced processor IP.

 

SNPS also undertook multiple steps to advance its IP portfolio in 2024. It rolled out industry’s first complete 1.6T Ethernet IP solution. This followed the certification of Synopsys’ IP on Samsung Advanced SF2 GAA Process. In the domain of IP chips, the company also collaborated with Intel (INTC Quick QuoteINTC - Free Report) and TSMC to launch INTC’s Pike Creek.

 

Intel's Pike Creek is the world's first silicon-proven UCIe-connected chip, featuring an Intel UCIe IP die built on the Intel 3 process node and a Synopsys UCIe IP die built on the TSMC N3E process. In 2024, SNPS also pioneered the launch of complete PCIe 7.0 IP solution containing PHY, controller, IDE security module and verification IP.

 

Synopsys also sold off its Software Integrity Business to Clearlake Capital and Francisco Partners to be able to free up its resources for advancing its core design automation and design IP segments.

Synopsys is benefiting from solid design wins due to a robust product portfolio. Also, certifications provide assurance for products to customers, which ultimately increases its adoption.

 

The growing demand for advanced technology, design, IP and security solutions is also creating solid prospects. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new compute and machine learning architectures.

 

These trends are aiding Synopsys’ top-line growth. In the second quarter of 2024, SNPS’ revenues increased 15% year over year to $1.45 billion.

 

SNPS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.