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Synopsys, Porsche Consulting Team Up for Auto Development

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Synopsys SNPS recently announced the co-development of a whitepaper with Porsche Consulting to accelerate development of automotive for the digital future.

The new solution is expected to address the rising complex electronics hardware and software architectures of next-generation autonomous, connected and electric vehicles, which pose major challenges to automotive engineering teams.

Reportedly, by leveraging Synopsys' Triple Shift-Left approach, automotive companies can boost silicon chip design with automotive-grade IP, expedite software development with virtual prototyping solutions and address functionality, safety and reliability all along the development process.

Product Strength: A Catalyst

Synopsys is benefiting from increasing global design activity and customer engagements. Its penetration into new and growing AI chip entities is a major driver.

Rising impact of ML, AI, Automotive, 5G, IoT, cloud and the proliferation of Smart Everything are boosting demand for its advanced solutions. Expanding relationships with EDA and IP customers plus ecosystem partners are a key catalyst.

Growing popularity of Synopsys’s IP solutions, particularly in the automotive end-market, holds promise. Notably, advanced driver-assistance systems (ADAS) market is estimated to hit $91.83 billion by 2025, per MarketAndMarkets data.

On the last earnings call, management mentioned that during 2019, momentum in automotive sped up. The company achieved nearly 230 automotive socket wins and advanced FinFET processes across around 30 key semiconductor companies.

Further, the company collaborated with Infineon to incorporate the ARC embedded vision processor into its next-generation Rx controller for accelerating AI in automotive applications.

It also forged an alliance with Samsung Foundry to deliver comprehensive automotive chip design solutions for meeting the target automotive safety integrity levels (ASILs) with regard to autonomous driving and ADAS.

The emerging clout of AI, 5G and ADAS chipset making is fueling demand for computational software tools, which favors Synopsys’s prospects. According to ResearchAndMarkets data, the EDA tools market is forecast to reach $17.35 billion by 2024 from $9.76 billion in 2018 at a CAGR of 10.1%.

Given the company’s capability to cater to the growing complex design requirements of customers, we believe, it is well-poised to capitalize on this opportunity.

Zacks Rank & Other Stocks to Consider

Synopsys currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the broader technology sector are Baidu (BIDU - Free Report) , Marchex MCHX and CommVault Systems CVLT, flaunting the same top Zacks Rank as Synopsys. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Baidu, Marchex and CommVault is currently pegged at 2.3%, 15% and 10%, respectively.

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