How Does Synopsys Company Work?

Synopsys' primary offerings include Electronic Design Automation (EDA) software, a critical suite of tools for designing, verifying, and testing integrated circuits. They also provide Design IP, which are pre-designed functional blocks that accelerate chip development.

The company serves a wide array of customers, including semiconductor manufacturers, electronics system companies, and software developers. These clients operate in high-growth sectors like AI, automotive, and communications.

A significant driver of Synopsys' operations is its commitment to research and development, with an investment of $2.2 billion in R&D during fiscal year 2024. This investment fuels continuous innovation in their EDA tools, such as the Synopsys.ai suite.

Synopsys' supply chain is predominantly digital, focusing on software development and licensing. This is supported by strategic partnerships and a global distribution network to ensure its solutions reach customers worldwide.

The acquisition of Ansys in July 2025 represents a significant step in integrating simulation and analysis capabilities with Synopsys' existing strengths in silicon design and IP. This consolidation aims to provide a comprehensive solution for the entire product development lifecycle.

Prior to the Ansys acquisition, Synopsys streamlined its operations by selling its optical systems division in September 2024 and its Software Integrity Group business for up to $2.1 billion in September 2024. These actions underscore a commitment to concentrating on its core electronic design automation (EDA) tools and intellectual property (IP) offerings.

Synopsys operations have faced macroeconomic uncertainties and geopolitical risks, notably impacting sales in China. While U.S. export restrictions in May 2025 initially posed challenges, their rescission in July 2025 allowed for the resumption of sales, with the company reaffirming strong double-digit revenue growth for the full year 2025.

The company's competitive advantages are rooted in its technology leadership, particularly in AI-driven EDA tools like Synopsys.ai, which have demonstrated significant productivity improvements for designers. Synopsys holds the largest market share in digital design, offering a comprehensive suite of tools essential for customers.

Synopsys is a dominant player in the EDA market, with a strong focus on digital design. Its extensive portfolio and AI integration have solidified its leadership. The company's global revenue in fiscal year 2024 was significantly driven by the United States, accounting for 44.71%, followed by China at 16.15%.

The Synopsys business model faces risks from geopolitical tensions, especially concerning technology exports to China, though U.S. export restrictions were lifted in July 2025. Intense competition and the need for continuous R&D investment to maintain its edge are also critical factors. Dependence on the semiconductor industry's cyclical nature and a concentrated customer base are additional considerations.

Looking ahead, Synopsys is leveraging mega-trends like AI and silicon proliferation. The acquisition of Ansys, completed in July 2025 for $35 billion, is central to its strategy, aiming to offer holistic system design solutions and expand into a larger $31 billion total addressable market.

Synopsys expects to integrate Ansys capabilities by the first half of 2026, enhancing its EDA stack with multiphysics. The company is also expanding its generative AI tools to boost designer productivity. Full-year 2025 revenue guidance remains between $6.745 billion and $6.805 billion, underscoring its commitment to innovation and strategic growth.