Synopsys Leads Joint Investment With Juniper in New Silicon Photonics Company; Maintain $325 FVE

On April 4 narrow-moat Synopsys announced a joint investment with no-moat Juniper Networks into a new, separate company, in which Synopsys will be the majority owner. The yet-to-be-named new company (NewCo) will provide an open silicon photonics platform that enables lower-cost lower-power silicon photonics integration for chip designs through a process design kit, or PDK. Juniper is reported to contribute integrated silicon photonics assets, including 200-plus photonic device design and process integration patents. Synopsys’ current capabilities in silicon photonics are delivered through its unified electronic photonic design automation solution. We believe the joint investment will enable NewCo to accelerate Synopsys’ pre-existing photonics capabilities, and breed a leading EDA tool for high-performance photonic integrated circuits, or PICs. While silicon photonics is a nascent opportunity, we expect the technology to become increasingly influential as data transmission requirements accelerate.