GlobalFoundries to acquire Synopsys processor unit in "physical AI" expansion

Synopsys (NASDAQ:SNPS) has reached a definitive agreement to sell its Processor IP Solutions business to GlobalFoundries (NASDAQ:GFS), a strategic divestiture that signals a narrowing of focus for the EDA giant toward high-growth interface and foundational silicon IP.

The transaction, announced Wednesday, includes Synopsys’ established ARC CPU and ARC-V (RISC-V) portfolios, along with its Digital Signal Processing (DSP) and Neural Network Processing Unit (NPU) IP.

GlobalFoundries intends to integrate these assets with MIPS, the historic processor architecture firm it took private in 2021, to create a comprehensive suite for "Physical AI"—the localized processing of artificial intelligence on edge devices.

For Synopsys, the move is a maneuver to "sharpen its spear."

By shedding its processor unit, the company is doubling down on its market-leading Interface IP (such as PCIe, USB, and DDR) and Foundation IP (logic libraries and embedded memories).

These sectors are currently seeing a massive surge in demand as cloud providers and automotive manufacturers race to build custom AI accelerators that require massive data throughput.

GlobalFoundries views the acquisition as a way to lower the barrier for customers looking to build custom silicon.

By owning the processor IP, the foundry can offer more "end-to-end" solutions, potentially enticing customers to keep their chip manufacturing on GlobalFoundries' specialized 22nm and 12nm process nodes.

Synopsys clarified that the transaction is not material to its overall financial results and did not disclose the purchase price.