Sassine Ghazi, the CEO of Synopsys Inc (NASDAQ:SNPS), emphasized the company's crucial role in the chip design industry, particularly for NVIDIA Corporation (NASDAQ:NVDA).
What Happened: Ghazi spoke with Jim Cramer on Tuesday, highlighting Synopsys' significance in the creation of graphics chips that power advanced artificial intelligence (AI) technology. Nvidia, a major player in the chip industry, is reliant on Synopsys' electronic design automation software for chip architecture, design, and verification, reported CNBC.
"We're mission critical to the chip design industry, and in this particular case, Nvidia," Ghazi stated. "Every designer inside Nvidia is using our software to architect it, to actually design it and verify it. Then, once they're ready to ship it to manufacturing, we are the bridge to manufacturing. So, we work with the foundry, with the silicon, and our software to enable it."
He also discussed Synopsys' recent acquisition of Ansys, an engineering and product design software firm, for $35 billion. Ghazi believes that the combined capabilities of the two companies can predict the real-world performance of graphics chips. Synopsys specializes in creating digital twins for electronics, while Ansys excels in simulating physical processes.
Why It Matters: Nvidia's recent announcements have made it clear that the company is not just a chipmaker but an accelerated computing company. This was highlighted by Nvidia CEO Jensen Huang during the GTC2024 event. Nvidia's stock has been predicted to reach $1,000 due to its AI capabilities, as per Goldman Sachs.
Despite a slight drop in Nvidia's stock after the GTC2024 event, other companies mentioned during the event, such as Synopsys, saw a significant rise in their stock prices. This indicates the importance of Synopsys in the chip industry and its close relationship with Nvidia.
Meanwhile, CNBC's Jim Cramer has expressed his belief that Nvidia will drive the next industrial revolution, emphasizing the company's potential to revolutionize enterprise with its software.
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