NEW YORK: Activist investor Elliott Investment Management makes a multibillion dollar investment in Synopsys Inc and plans to push for changes at the chip-design software maker, according to people familiar with the matter, who asked not to be identified because it was private.
Elliott Managing Partner Jesse Cohn said in a statement that Synopsys is essential to the global chip industry.
He added that as artificial intelligence (AI) drives changes in chip complexity and capital investment, Synopsys is uniquely positioned to benefit.
“Given the essential nature of its platform and these structural tailwinds, we believe there is a clear opportunity for Synopsys’ financial performance to more fully reflect the value it delivers,” Cohn said.
“We look forward to engaging with the company to help align operational execution, profitability and monetisation with its potential and importance to the semiconductor ecosystem.”
Synopsys said in an emailed statement that it doesn’t comment on specific conversations with individual shareholders.
“Synopsys’ board of directors and management team regularly engage with our shareholders on a range of issues and value their input,” the company said.
Along with rival Cadence Design Systems Inc, Synopsys leads the market for electronic design automation, a key part of chip development.
But Synopsys’ revenue growth has recently trailed expectations.
Its shares are down 11% this year through last Friday, giving it a market value of US$80.5bil.
Both Synopsys and Cadence have faced broader concerns that AI will render traditional software less necessary in the design of chips.
Cadence said last month that it was introducing a new AI tool that would help speed the process, arguing that AI can help elevate design software rather than eliminate it. — Bloomberg
