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Synopsys (SNPS), Juniper to Jointly Form Silicon Photonics Firm
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Synopsys (SNPS - Free Report) and Juniper Networks (JNPR - Free Report) recently announced their plan to create a new and separate company to provide an open silicon photonics platform. The companies plan to unveil the name of the new entity at a later date.
The two companies revealed that the new firm would be created, in part, from the carve-out of integrated silicon photonics assets from Juniper. Currently, Juniper has more than 200 patents on photonic device design and process integration. Synopsys will be the majority stakeholder and the financial results of the jointly owned company will be consolidated into its financials.
Synopsys projects the investment to be slightly dilutive to its fiscal 2022 earnings. However, SNPS is assured that the transaction will have no material impact on its second-quarter and full-year 2022 guidance ranges, which the company provided in February 2022. Moreover, the deal is anticipated to have no impact on JNPR’s full-year financial outlook.
Silicon Photonics is currently an evolving technology under which data is transferred through optical rays among computer chips, which can carry far more data at a faster speed than conventional electronic circuits. Also, silicon photonics consumes less power and generates less heat than electrical conductors. Therefore, it is more energy-efficient and cost-effective.
The silicon photonics market is witnessing significant growth for the past few years, mainly driven by the increased demand for high bandwidth and high data transfer capabilities. The pandemic-led work-and-learn-from-home trend has also spurred the necessity for high speed and data transfer capabilities, thereby driving demand for silicon photonics. An increase in the deployment of the 5G network is anticipated to further boost silicon photonics’ demand.
According to the Markets and Markets report, the silicon photonics market is anticipated to increase at a CAGR of 26.8% and reach $4.6 billion by 2027 from $1.1 billion in 2021. Another market research firm, Vantage Market Research, forecasts that the silicon photonics market will increase to $3.59 billion by 2028 from $1.08 billion in 2021, representing a CAGR of 25.8%.
Therefore, by forming a separate photonics company, the two companies are trying to tap the rapidly growing opportunities in the silicon photonics market.
The two companies stated that the jointly formed entity would address the growing demand for silicon photonics in applications across several industries, including telecom, datacom, Light Detection and Ranging or LiDAR, healthcare, high performance computing, AI and optical computing.
Through its silicon photonics platform, the new firm will offer “integrated lasers, optical amplifiers, and a full suite of photonic components to form a complete solution that will be accessible through a Process Design Kit (PDK),” the companies said. The platform will help in developing energy-efficient and low-cost high-performance Photonic Integrated Circuits.
Zacks Rank & Other Stocks to Consider
Currently, Synopsys carries a Zacks Rank #2 (Buy), while Juniper has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by 10.2% to $8.64 per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 22 cents to $35.49 per share over the past 30 days.
Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 30% over the past year.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by seven cents to $1.43 per share over the past 90 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 60 days.
Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has soared 41.7% in the past 12 months.
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Synopsys (SNPS), Juniper to Jointly Form Silicon Photonics Firm
Synopsys (SNPS - Free Report) and Juniper Networks (JNPR - Free Report) recently announced their plan to create a new and separate company to provide an open silicon photonics platform. The companies plan to unveil the name of the new entity at a later date.
The two companies revealed that the new firm would be created, in part, from the carve-out of integrated silicon photonics assets from Juniper. Currently, Juniper has more than 200 patents on photonic device design and process integration. Synopsys will be the majority stakeholder and the financial results of the jointly owned company will be consolidated into its financials.
Synopsys projects the investment to be slightly dilutive to its fiscal 2022 earnings. However, SNPS is assured that the transaction will have no material impact on its second-quarter and full-year 2022 guidance ranges, which the company provided in February 2022. Moreover, the deal is anticipated to have no impact on JNPR’s full-year financial outlook.
Synopsys, Inc. Price and Consensus
Synopsys, Inc. price-consensus-chart | Synopsys, Inc. Quote
Growing Opportunity in Silicon Photonics
Silicon Photonics is currently an evolving technology under which data is transferred through optical rays among computer chips, which can carry far more data at a faster speed than conventional electronic circuits. Also, silicon photonics consumes less power and generates less heat than electrical conductors. Therefore, it is more energy-efficient and cost-effective.
The silicon photonics market is witnessing significant growth for the past few years, mainly driven by the increased demand for high bandwidth and high data transfer capabilities. The pandemic-led work-and-learn-from-home trend has also spurred the necessity for high speed and data transfer capabilities, thereby driving demand for silicon photonics. An increase in the deployment of the 5G network is anticipated to further boost silicon photonics’ demand.
According to the Markets and Markets report, the silicon photonics market is anticipated to increase at a CAGR of 26.8% and reach $4.6 billion by 2027 from $1.1 billion in 2021. Another market research firm, Vantage Market Research, forecasts that the silicon photonics market will increase to $3.59 billion by 2028 from $1.08 billion in 2021, representing a CAGR of 25.8%.
Therefore, by forming a separate photonics company, the two companies are trying to tap the rapidly growing opportunities in the silicon photonics market.
The two companies stated that the jointly formed entity would address the growing demand for silicon photonics in applications across several industries, including telecom, datacom, Light Detection and Ranging or LiDAR, healthcare, high performance computing, AI and optical computing.
Through its silicon photonics platform, the new firm will offer “integrated lasers, optical amplifiers, and a full suite of photonic components to form a complete solution that will be accessible through a Process Design Kit (PDK),” the companies said. The platform will help in developing energy-efficient and low-cost high-performance Photonic Integrated Circuits.
Zacks Rank & Other Stocks to Consider
Currently, Synopsys carries a Zacks Rank #2 (Buy), while Juniper has a Zacks Rank #3 (Hold).
Some other buy-rated stocks from the broader technology sector include Broadcom (AVGO - Free Report) and Apple (AAPL - Free Report) , both carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by 10.2% to $8.64 per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 22 cents to $35.49 per share over the past 30 days.
Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 30% over the past year.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by seven cents to $1.43 per share over the past 90 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 60 days.
Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has soared 41.7% in the past 12 months.