SUNNYVALE, Calif. - Synopsys, Inc. (NASDAQ:SNPS) has announced the launch of the first complete PCIe 7.0 IP solution, marking a significant milestone in data transfer technology for AI and high-performance computing (HPC) data centers. The new development, revealed today, is set to empower chipmakers with the capacity to manage the bandwidth and latency demands associated with massive AI data workloads.
The comprehensive PCIe 7.0 solution includes a controller, an IDE security module, PHY, and verification IP, aiming to facilitate data transfer speeds up to 512 GB/s. This represents a substantial improvement in power efficiency—up to 50% over previous iterations—while ensuring signal integrity is maintained.
Synopsys' PCIe 7.0 solution is built upon the company's extensive experience, boasting over 3,000 design wins in the field. The offering is designed to reduce integration risks for AI and HPC networking chips, doubling the interconnect bandwidth for the same chip perimeter compared to prior PCIe generations.
The PCIe 7.0 Controller IP focuses on low latency and high-bandwidth links, supporting backward compatibility with full endpoint to root-complex solutions. The PHY IP ensures signal integrity at speeds up to 128 Gb/s per lane and is designed to integrate with Synopsys CXL Controller IP solutions seamlessly. Furthermore, the Synopsys Integrity and Data Encryption (IDE) Security IP for PCIe 7.0 provides essential protection against hardware-level security threats.
Synopsys will showcase this technology at the PCI-SIG DevCon in Santa Clara on June 12 and 13, 2024, including demonstrations of the PCIe 7.0 IP's interoperability with multiple partners.
The announcement has garnered support from industry leaders who recognize PCIe 7.0 as a critical component for AI data center infrastructure, capable of addressing the performance demands of AI clusters at scale. Companies like Intel Corporation (NASDAQ:INTC), Astera Labs, Enfabrica, Kandou, XConn, Rivos, Microchip (NASDAQ:MCHP), and Samtec have expressed confidence in PCIe 7.0's ability to enhance system architectures and enable the efficient processing of large language models and other AI-driven data tasks.
The Synopsys PCIe 7.0 Controller with IDE Security and PHY IP is scheduled for general availability in early 2025, with the Verification IP for PCIe 7.0 already available. This announcement is based on a press release statement from Synopsys, Inc.
In other recent news, Synopsys, a leader in electronic design automation software, has reported strong financial results for the second quarter of fiscal year 2024. The revenue climbed 15% year-over-year to $1.45 billion, and non-GAAP earnings per share surged by 26%. This led to an increase in the company's full-year revenue and non-GAAP EPS forecasts.
In the wake of these results, Synopsys received a reiterated Buy rating from Griffin Securities and Deutsche Bank (ETR:DBKGn), with price targets of $650 and $645 respectively. Piper Sandler also showed confidence in the company by increasing its price target to $672 and maintaining an Overweight rating.
In other developments, Synopsys announced the sale of its Software Integrity Group, which is expected to close in the second half of 2024. The company's Design Automation sector has been highlighted for its continued momentum and significant increase in backlog, indicating a higher number of contracts and orders than previously estimated. Analysts from both Griffin Securities and Deutsche Bank anticipate this trend to continue, driven by the foundational role that electronic design automation plays in the tech industry.
These recent developments underline the robust performance and promising outlook for Synopsys, positioning it favorably for future growth.
InvestingPro Insights
As Synopsys, Inc. (NASDAQ:SNPS) leads the charge in PCIe 7.0 technology, the company's financial metrics provide a backdrop to its innovative strides. With a robust market capitalization of $87.56 billion, Synopsys showcases its significant presence in the software industry. An InvestingPro Tip highlights the company's impressive gross profit margins, which stand at 80.39% for the last twelve months as of Q2 2024. This figure not only reflects the company's ability to manage costs but also its pricing power in the competitive tech sector.
The firm's dedication to innovation and market leadership is further mirrored in its revenue growth, which has surged by 25.53% over the same period. This growth trajectory indicates a strong market demand for Synopsys' offerings, including the latest PCIe 7.0 IP solution. Additionally, the company's Price / Book ratio is at 12.24, suggesting a premium valuation that investors are willing to pay for its shares, possibly due to the company's high-quality assets and strong future growth prospects.
While Synopsys does not pay a dividend, indicating a reinvestment of earnings back into the company for further growth, an InvestingPro Tip notes that the company is a prominent player in the Software industry. This is a critical factor for investors who are looking for companies with a commanding industry position and the potential for sustained market dominance.
For readers interested in a deeper dive into Synopsys' financials and for access to more exclusive insights, InvestingPro offers additional tips on the company's performance and valuation. There are 18 additional InvestingPro Tips available for Synopsys, which can be accessed by visiting https://www.investing.com/pro/SNPS. To enrich your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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