Synopsys (SNPS), a top chip design software company, saw its shares crash nearly 35% on Wednesday, September 10, 2025. This erased all gains for the year in a single day.
The drop, one of the worst in the company’s history, came from U.S.-China trade issues and poor quarterly results. Check the finance card above for price details.
What Caused the Drop?
Synopsys reported $1.74 billion in revenue for the third quarter, ending July 31, 2025. This missed Wall Street’s $1.77 billion forecast. Earnings per share were $3.39, below the expected $3.74.
CEO Sassine Ghazi blamed U.S. export rules that blocked sales to China and problems with a key customer, likely Intel (INTC).
China makes up over 10% of revenue for chip design firms like Synopsys. U.S. restrictions in late May cut off this market for over a month. Though lifted in July, the rules hurt customer trust and reduced spending, according to Piper Sandler analysts.
Ripple Effects in the Industry
The U.S. has long limited China’s access to American chip technology, hurting companies like Synopsys. Its intellectual property (IP) business saw an 8% revenue drop to $428 million compared to last year.
Shares of rival Cadence Design Systems (CDNS) also fell nearly 7%, closing at $334.77. See the finance card above. Intel’s stock stayed steady at $24.465.
Intel’s Influence
CEO Ghazi didn’t name the customer, but analysts point to Intel. Synopsys likely invested heavily in Intel’s “18A” chip project, which Intel scaled back.
Originally meant for outside clients, Intel now plans to use 18A mainly for its own products, J.P. Morgan analysts said.
Big Changes at Synopsys
Synopsys recently bought Ansys, a design software firm, for $35 billion in July 2025. This boosted its design automation revenue by 23% to $1.31 billion, but IP weakness and merger costs hurt overall results.
To cut costs, Synopsys will reduce its workforce by 10% by the end of 2026, Ghazi said.
What’s Next?
Synopsys cut its full-year earnings forecast to $12.76–$12.80 per share, down from $15.11–$15.19, missing Wall Street’s $15 target.
Bank of America downgraded the stock from Buy to Underperform, lowering its price target from $625 to $525. Despite challenges, Synopsys remains a leader in chip design and AI solutions, but trade tensions and customer issues are hurdles.
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