Synopsys and Amazon Sign Multi-Year Silicon IP Agreement Valued at More Than $1 Billion

Synopsys, Inc. (NASDAQ:SNPS) announced a multi-year agreement with Amazon (NASDAQ:AMZN) valued at more than $1 billion, covering silicon intellectual property and engineering software for Amazon’s custom chip development.

Under the agreement, Amazon will become the lead customer for Synopsys’ application-optimized silicon IP business. The arrangement expands a collaboration between the companies that has lasted for more than 15 years.

The agreement covers Synopsys’ electronic design automation (EDA), simulation and analysis, and agentic artificial intelligence technologies. These tools will support Amazon’s custom silicon portfolio, including its Nitro, Graviton and Trainium processors.

Agreement Introduces License-Plus-Royalty Model

The companies have structured the agreement around a license-plus-royalty business model.

Under the arrangement, payments to Synopsys are designed to increase alongside Amazon’s production volumes.

Peter DeSantis, SVP of foundational AI, custom silicon, and quantum computing at Amazon, said the expanded collaboration would support the company’s chip development process.

The partnership helps Amazon “move faster across the design cycle, helping us deliver more capable, efficient computing for customers worldwide,” DeSantis said.

Synopsys to Use AWS Infrastructure for Product Development

The agreement also expands Synopsys’ use of Amazon’s cloud infrastructure.

Synopsys will adopt Amazon Web Services infrastructure for its own product development, including Amazon Elastic Compute Cloud (Amazon EC2), cloud storage services and Amazon Bedrock, which it plans to use to build and deploy artificial intelligence applications.

The company will also work to optimize its software for Amazon’s Trainium and Graviton processors.

The arrangement therefore covers both Amazon’s use of Synopsys technology for custom chip development and Synopsys’ use of Amazon infrastructure and processors within its own development operations.

Synopsys Expands Silicon IP Relationship With Amazon

Sassine Ghazi, president and CEO of Synopsys, described the agreement as “the next phase of growth” for the company’s IP business.

Ghazi added that combining the companies’ respective capabilities could “dramatically increase the productivity of our teams.”

The multi-year agreement builds on the companies’ existing relationship while establishing Amazon as the lead customer for Synopsys’ application-optimized silicon IP business.

Synopsys stock price

Amazon stock price