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Synopsys Management Discusses Q2 2012 Results - Earnings Call Transcript

For the present quarter and year, Brian will provide more financial detail in just a minute. Before addressing the product highlights, let me comment on the current landscape. For as the economic ups and downs are readily visible in the press on a daily basis, the electronics and semiconductor industries are racing forward from a technology point of view. While electronic consumption is staying high, the battle for share among the providers is quite intense, resulting in some consolidation and accelerated push towards the 28-nanometer production of advanced chips and substantial investments into the next generations of technology.

For our industry, this clearly means additional pressure as we support challenged and very competitive customers. But also, a solid landscape of renewals, add-on purchases and emphasis on value selling.

We expect that going forward, customers will rely more on EDA for improved design efficiency and product differentiation, which bodes well for our sustained growth prospects. In that sense, EDA feels healthier than it has been in a number of years.

These analysts are particularly positive for Synopsys. For many years, we have focused on building a set of complete solutions, ranging from system design to chip implementation to manufacturing. In addition, our time-based business model, supported by a substantial multiyear backlog, lets us continually invest in R&D and support in virtually any phase of the economic cycle.

Consequently, it's not surprising that the majority of the state-of-the-art designs are done with Synopsys tools and rely on the skills of our global support teams, which brings me to the highlights for the quarter, starting with our core EDA and manufacturing offerings.

One of the advanced areas in which both stress and excitement are visible on a daily basis, is in the design of processors, graphics and SSE. Clearly, our customers aim to achieve highest performance at lowest power. In this area, Synopsys shines. One example is with Samsung, who completed the first-ever production tape-out of a high-speed ARM Cortex-A15 processor relying exclusively on IC Compiler and Galaxy for physical design.

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