Synopsys co-CEO Aart De Geus says technical challenges facing chip makers bode well for design tool vendors.
Despite lingering economic doom and gloom, electronic design automation (EDA) vendors are poised for a strong 2013 as the semiconductor industry prepares to migrate to three-dimensional FinFET transistors while continuing to push the envelope with scaling to smaller process geometries, according to Aart de Geus, chairman and CEO of Synopsys Inc.
Synopsys—the largest EDA vendor—reported another strong quarter and fiscal year Wednesday (Dec. 5)—posting sales that exceeded analysts' expectations. The report followed a similar strong performance by Mentor Graphics Corp.—another of EDA's "big three"—last week.
"I think EDA in general and Synopsys in particular are very well positioned for 2013," de Geus said in an interview Wednesday following the quarterly report.
De Geus believes his company and EDA as a whole are poised to cash in by helping chip makers undertake enormous technical challenges amid fierce competition. Intel Corp. has already put its version of FinFET transistors—which Intel calls tri-gate transistors—into production. TSMC, Samsung, UMC and Globalfoundries all want to put FinFET technology into production in 2014. Foundry customers that want to get in on the ground floor of this technology must act quickly.
"The number of technical challenges is substantially higher than in the past," de Geus said. "We do see that customers need a lot of support to build the next generation of chips."
That need for support, of course, is music to the years of EDA vendors, who make their living alleviating customers' pain points. EDA—which in recent years has been perhaps unfairly labeled a low-growth industry with limited potential—has genuine opportunity in the years ahead as chip vendors tangle with massive new technical hurdles while fighting each other for every scrap of market share.
"The pressure is really high for customers to come up with the next chip sets to win," de Geus said.
Synopsys reported sales of $454.2 million for its fiscal fourth quarter, up 2 percent sequentially and16 percent year-to-year. The company reported a GAAP net income of $29.1 million, or 19 cents per share, down from a GAAP net income of $75.7 million in the previous quarter and $39.9 million in the year-ago quarter.
On a non-GAAP basis, excluding charges, Synopsys reported a net income for the quarter of $72.4 million, or 47 cents per share, down from $82.3 million in the previous quarter and up from $65.3 million in the year ago quarter.
For the fiscal year, Synopsys reported sales of $1.756 billion, up 14 percent from fiscal 2011. The company's GAAP net income for the year was $182.4 million, or $1.21 per share, down 18 percent from fiscal 2011.
Synopsys forecast sales for the fiscal first quarter to be between $468 million and $478 million, with GAAP earnings per share of 30 to 35 cents. For fiscal 2013, Synopsys said it expects sales to increase to between $1.955 billion and $1.975 billion.