Carved-Out

Today’s newsletter

• Synopsys carved-out Software Integrity Group at $2.1Bn

• Semiconductor specialist Imec.xpand unveils new €300Mn fund

Synopsys sells Software Integrity Group to Clearlake and Francisco Partners for $2.1Bn

Going once, going twice and sold! Synopsys (SNPS) has entered into a definitive agreement to sell its Software Integrity Group (SIG) to a private equity consortium led by Clearlake Capital and Francisco Partners.

• The deal, valued at $2.1 billion, marks a significant move as Synopsys divests this part of its business to focus more intensively on its core competencies in electronic design automation and semiconductor IP.

Why It Matters: This transaction is pivotal for Synopsys as it seeks to streamline its operations and concentrate on its foundational areas, particularly in a time when the tech industry is rapidly evolving.

• The sale will establish the Software Integrity Group as a newly independent entity, poised to become a leading provider in application security testing — a field that's gaining importance as digital security concerns mount globally.

When It Started: The strategic decision to sell the Software Integrity Group began to take shape late in 2023 when Synopsys announced it was exploring strategic alternatives for this division.

• The formal agreement with Clearlake Capital and Francisco Partners was established recently, marking a new chapter for the group and Synopsys itself.

What’s Next: Following the sale, the Software Integrity Group will likely pursue an expansion of its services and possibly innovate further in the application security domain under its new ownership.

• For Synopsys, the divestment frees up resources and focus for its intensified push into semiconductor design technologies, where it already holds a significant market presence.

• This move could enhance shareholder value as Synopsys reallocates capital and resources to areas with higher growth potential in the tech sector.

To Learn More about Synopsys and EDA software, highly recommend in-depth analysis available at Data Gravity (read more)

Semiconductor specialist Imec.xpand unveils new €300Mn fund

Semiconductor specialist fund! Imec.xpand, a chip and nanotech-focused venture capital fund, announced the launch of a new €300Mn fund. The specialized tech fund, based in Leuven, Belgium, will target innovations in semiconductors and nanotechnology.

Who is it: Imec.xpand is an independent venture arm associated with imec, a leading research center in nanoelectronics and digital technologies based in Belgium.

• Imec.xpand was established seven years ago as a collaborative effort with imec, an R&D and innovation hub in nanoelectronics.

• To date, Imec.xpand has invested in 23 companies, two of which have grown to become unicorns.

Why it matters: The new €300Mn fund by Imec.xpand is pivotal as it aims to bridge the critical gap between foundational technological research and market-ready products.

• This fund is expected to accelerate innovations particularly in semiconductor technologies which are essential for a wide range of applications from computing to healthcare.

What’s Next: Moving forward, Imec.xpand plans to invest in startups that are positioned to leverage imec’s technological infrastructure and expertise to scale their innovations.

• The fund will focus on early to growth-stage companies worldwide, facilitating the development of disruptive and strategic technologies that align with imec’s research domains.

🚀 Funding & Deal

• Wayve, based in London, UK, has raised $1.05 billion in a Series C funding round led by SoftBank, with significant contributions from NVIDIA and Microsoft. The company is focusing on developing Embodied AI for autonomous driving, aiming to enhance vehicle intelligence for safer and more efficient navigation across varied driving environments. (read)

• DeepX, a Seoul-based AI chip startup, has raised $80 million in a Series C funding round led by Skylake Equity Partners, bringing its valuation to $529 million. The Series C funding will go toward mass production of the startup’s inaugural products in late 2024 for global distribution. (read)

• Niobium, a Dayton, OH-based custom silicon provider, raised $5.5M in seed funding from Fusion Fund, Morgan Creek Capital, Rev1 Ventures, Ohio Innovation Fund, and Hale Capital to develop hardware for fully homomorphic encryption, targeting applications like healthcare, financial fraud detection, and blockchain. (read)

• Kubos Semiconductors, based in Cambridge, UK, recently raised £760,000 in a funding round led by Turquoise through the Low Carbon Innovation Fund 2 (LCIF2). The company is focused on developing and commercializing its proprietary cubic GaN (gallium nitride) technology. (read)

• SoftBank, is in advanced talks to acquire UK-based artificial intelligence chipmaker Graphcore. The deal, which has not yet been finalized, highlights the strategic importance of AI technology and Graphcore's potential in competing against major players like Nvidia in the AI industry. (read)

🧿 Capital Market

• Arm Holdings (NASDAQ:ARM) shared annual revenue forecast of between $3.8 billion and $4.1 billion, slightly below the consensus estimate (read)

• Sivers Semiconductor AB (STO:SIVE) announced Q1 revenue with 35% improved EBITDA and growing order intakes. Sivers is a leading supplier of integrated chips and modules for advanced communications and sensor solutions for AI Photonics, SATCOM and 5G/6G (read)

• Data Centers and fabs drive rising utility demand in Arizona. Pinnacle West Capital (NYSE:PNW), the parent company of Arizona Public Service, reported first quarter net income of $16.9 million, compared with a $3.3 million loss in the same period last year. Longer-term, new production facilities built by TSMC will further increase sales (read)

• Power Integrations (NASDAQ: POWI), based in San Jose, California, has announced the acquisition of the assets of Odyssey Semiconductor Technologies, a developer of vertical gallium-nitride (GaN) transistor technology. (read)

• Apollo Global Management, KKR & Co, and Stonepeak are considering investing billions of dollars in a joint venture to fund Intel's semiconductor fabrication facility in Ireland. Intel is making this investment to enhance its chip manufacturing capabilities through the integration of EUV technology at its $18.5 billion plant in Ireland (read)

🌏 Around The Globe

• Worldwide sales of semiconductors totaled $137.7 billion during the first quarter of 2024, an increase of 15.2% compared to the first quarter of 2023

• The U.S. only had 10% of the world’s chip manufacturing capacity in 2022 but the country is projected to grow its fab capacity by 203% in the next decade

• Without the CHIPS Act, the U.S. share would have slipped further to 8% by 2032, according to the report

• The top five IC design houses boosted their 2023 revenues to $55.3 billion — a 105% year-over-year increase primarily driven by NVIDIA’s AI GPU H100

• The Biden administration announced a $285 million investment to fund a project developing digital twins for semiconductor manufacturing

• Canalys forecasted the future sales and deployment of AI-enabled PCsthat in 2024 19% of PCs will be AI-capable, expecting

• Military and Defence Semiconductor market is projected to grow at a CAGR of 8.7% by 2034

• Japan's Rapidus is intensifying its efforts to begin mass production of next-generation semiconductors by 2027

• Driven by demand for AI chips, SK hynix revealed it has already booked its entire production of high-bandwidth memory chips for 2024

• IBM will invest CAD$187 Mn (~US$137Mn) in Canada’s semiconductor industry, with the focus on advanced assembly, testing, and packaging operations

• Tesla's Dojo system-on-wafer processor for AI training is now in mass production

🗼 In-Depth & Insights

• Data Gravity featured a deep-dive analysis on ASML, a behemoth behind the nano-scale extreme ultraviolet (EUV) lithography equipment essential for modern semiconductor manufacturing (read)

• Semiconductor Digest discusses the significant advancements in flip chip technology, which is rapidly evolving to replace traditional wire bonding methods in semiconductor packaging (read)

• Why RISC-V is so important? XDA Developers wrote a great piece covering how open-source chip designs are helping to drive innovation in custom hardware developed for a range of purposes (read)

• Silicon Valley Defense Group released a short clip featuring discussions with semiconductor experts Chris Miller and Steve Blank on the critical role of semiconductors in national security and the economy (watch)

• Acquired Podcast dives into the realm electronic design automation (EDA). The latest episode features insights from Aart de Geus, co-founder and Executive Chair of Synopsys, and Sassine Ghazi, CEO and President of the $80 billion company (listen)

📈 Chart of the Week