By Cynthia Kim and Hyunjoo Jin
SEOUL, July 7 (Reuters) – U.S. chip design giant Synopsys plans to stop offering a suite of manufacturing process control software used by global semiconductor makers, six sources briefed on the matter said, as it seeks to divert resources to higher-margin offerings such as AI design.
Synopsys in April and May informed more than 10 chipmakers including Samsung Electronics, SK Hynix, Kioxia Holdings Corp and Qorvo Inc about the “end of life” move that means Synopsys will not provide future new versions and will only carry out maintenance obligations, two of the sources said.
The affected products include the Equipment Engineering System (EES) and Fault Detection and Classification (FDC), a set of automation software that acts as the central nervous system of semiconductor fabrication plants to monitor and detect any anomalies before they cascade into costly defects, the two sources said.
The company has already laid off a few dozen staff, said three of the sources, one of whom added that Synopsys plans to conclude talks with each chipmaker on maintenance obligations by July.
Synopsys is discontinuing some legacy manufacturing analytics products to focus resources on the highest-value products, a company spokesperson told Reuters in a statement, without naming the products.
The move highlights a changing balance in the semiconductor software industry, where vendors are investing more heavily in AI design technologies while some chipmakers increasingly build manufacturing software in-house.
“While we are discontinuing certain manufacturing analytics products, which are older diagnostic tools not in our customers’ critical paths of production, we continue to invest in new capabilities in this area of our portfolio and are honoring all existing contractual and support obligations as we take this action,” the Synopsys spokesperson said.
The company declined to disclose whether job cuts were involved.
CUSTOMERS LOOK TO DEVELOP IN-HOUSE TOOLS
Synopsys began offering the EES product after acquiring semiconductor manufacturing solutions from South Korean firm BISTel in 2021 for an undisclosed amount.
One of the sources said Synopsys had been wanting to be free of support and maintenance obligations related to IP services and to reallocate engineers to high-margin AI design. Synopsys completed its $35 billion purchase of engineering software firm Ansys in 2025.
That person and a second source said the software’s removal risked causing some declines in production yields for chipmakers as the software needed to be constantly maintained, updated and patched.
However, four of the other sources said they did not expect an impact on production at major chipmakers.
One of the sources said the decision was also taken partly because enhancing the EES service required chipmakers to share tightly-held manufacturing data. Some clients like Samsung were also developing their own in-house tools, impacting the competitiveness of Synopsys’ offerings, two sources said.
A Samsung spokesperson confirmed the end-of-life decision and said active discussions were underway with Synopsys regarding the product’s sunset. Samsung had established compatible alternatives and there would be “no negative impact on production,” the spokesperson said when asked if production yields could decline.
SK Hynix declined to comment. Kioxia and Qorvo did not respond to requests for comment.
Synopsys has for decades been one of the main suppliers of software used in determining how to arrange the tens of billions of transistors that make up chips, which can be 2,000 times smaller than the width of a strand of human hair.
In March, Synopsys introduced a technology it said would pave the way toward AI agents taking over many of the tasks in creating chips.
(Reporting by Cynthia Kim and Hyunjoo Jin in Seoul, Wen-Yee Lee in Taipei and Stephen Nellis in San Francisco; Editing by Brenda Goh and Jamie Freed)
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