Synopsys signs $1B+ multi-year custom silicon IP agreement with AWS

Investing.com -- Synopsys Inc (NASDAQ: SNPS) stock rose 1.5% in Wednesday premarket trade after the chip design software maker announced a multi-year deal with Amazon Web Services worth more than $1 billion to license its silicon intellectual property. The agreement establishes Amazon.com Inc (NASDAQ: AMZN) as the lead customer for Synopsys' expanded offering of application-optimized IP blueprints.

Synopsys produces electronic design automation software used by major chipmakers to lay out billions of transistors on silicon, alongside a growing IP licensing business that generated $1.75 billion in revenue during its most recent fiscal year. While Synopsys historically focused on licensing standard chip components, the new arrangement expands its reach into more complex, custom designs suited for specific cloud workloads.

For AWS, the partnership supports its ongoing push to design in-house processors, including its Graviton central processing units and Trainium artificial intelligence accelerators. The companies did not disclose which specific AWS chips will incorporate the Synopsys blueprints, though the deal also includes the integration of Synopsys’ simulation, analysis, and agentic AI software into AWS engineering workflows.

As part of the agreement, Synopsys will transition its silicon IP unit toward a license-plus-royalty economic model, tying future financial returns directly to production volumes as customer chip usage grows. In turn, Synopsys will adopt AWS cloud compute and storage services, along with Amazon Bedrock, to build and deploy its own internal AI applications and accelerate tool development.

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