Chip Stock Investor Podcast Intel and China Are Hurting Synopsys (SNPS) Stock. Here's Why.
Sep 12, 2025
The discussion dives into Synopsys' recent quarterly performance, highlighting challenges from reduced revenue in China and issues with a key foundry customer. A restructuring plan includes a 10% headcount reduction, shifting focus towards higher-growth opportunities. The hosts outline the significance of Synopsys' move into custom IP and the competitive landscape amid ongoing market volatility. Ultimately, they stress the importance of diversifying stock portfolios to navigate these fluctuations.
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Pro Forma Growth And Margin Targets
- Synopsys plus Ansys pro forma revenue grew in the low teens over five years and reached about $8.8–9B LTM.
- Management expects low-teens revenue growth and margin expansion to mid-40% operating margin over time.
EDA Growing While IP Sales Drop
- Core EDA revenue still grew around 10% year-over-year while design IP sales declined.
- Design IP fell from $463M to $428M, dragging overall results and reflecting customer shifts.
China And Intel Hit IP Revenue
- Management cited three culprits: China restrictions, challenges at a major foundry customer, and roadmap/resource missteps.
- The hosts infer the foundry issue largely reflects Intel's reduced demand for Synopsys IP.