* Synopsys ( SNPS ) informed chipmakers including Samsung, SK Hynix

about 'end of life' move, sources say

* Software helps monitor and detect production anomalies

during chip production

* Synopsys ( SNPS ) says it is discontinuing select legacy products

to focus resources on other higher-value ones

By Cynthia Kim and Hyunjoo Jin

SEOUL, July 7 (Reuters) - U.S. chip design giant Synopsys ( SNPS )

plans to stop offering a suite of manufacturing process

control software used by global semiconductor makers, six

sources briefed on the matter said, as it seeks to divert

resources to higher-margin offerings such as AI design.

Synopsys ( SNPS ) in April and May informed more than 10 chipmakers

including Samsung Electronics ( SSNLF ), SK Hynix, Kioxia

Holdings Corp ( KXHCF ) and Qorvo Inc ( QRVO ) about the "end of

life" move that means Synopsys ( SNPS ) will not provide future new

versions and will only carry out maintenance obligations, two of

the sources said.

The affected products include the Equipment Engineering

System (EES) and Fault Detection and Classification (FDC), a set

of automation software that acts as the central nervous system

of semiconductor fabrication plants to monitor and detect any

anomalies before they cascade into costly defects, the two

sources said.

The company has already laid off a few dozen staff, said

three of the sources, one of whom added that Synopsys ( SNPS ) plans to

conclude talks with each chipmaker on maintenance obligations by

July.

Synopsys ( SNPS ) is discontinuing some legacy manufacturing

analytics products to focus resources on the highest-value

products, a company spokesperson told Reuters in a statement,

without naming the products.

The move highlights a changing balance in the semiconductor

software industry, where vendors are investing more heavily in

AI design technologies while some chipmakers increasingly build

manufacturing software in-house.

"While we are discontinuing certain manufacturing

analytics products, which are older diagnostic tools not in our

customers' critical paths of production, we continue to invest

in new capabilities in this area of our portfolio and are

honoring all existing contractual and support obligations as we

take this action," the Synopsys ( SNPS ) spokesperson said.

The company declined to disclose whether job cuts were

involved.

CUSTOMERS LOOK TO DEVELOP IN-HOUSE TOOLS

Synopsys ( SNPS ) began offering the EES product after acquiring

semiconductor manufacturing solutions from South Korean firm

BISTel in 2021 for an undisclosed amount.

One of the sources said Synopsys ( SNPS ) had been wanting to be free

of support and maintenance obligations related to IP services

and to reallocate engineers to high-margin AI design. Synopsys ( SNPS )

completed its $35 billion purchase of engineering software firm

Ansys in 2025.

That person and a second source said the software's removal

risked causing some declines in production yields for chipmakers

as the software needed to be constantly maintained, updated and

patched.

However, four of the other sources said they did not expect

an impact on production at major chipmakers.

One of the sources said the decision was also taken partly

because enhancing the EES service required chipmakers to share

tightly-held manufacturing data. Some clients like Samsung were

also developing their own in-house tools, impacting the

competitiveness of Synopsys' ( SNPS ) offerings, two sources said.

A Samsung spokesperson confirmed the end-of-life decision

and said active discussions were underway with Synopsys ( SNPS )

regarding the product's sunset. Samsung had established

compatible alternatives and there would be "no negative impact

on production," the spokesperson said when asked if production

yields could decline.

SK Hynix declined to comment. Kioxia ( KXHCF ) and Qorvo ( QRVO ) did not

respond to requests for comment.

Synopsys ( SNPS ) has for decades been one of the main ​suppliers of

software used in determining how to arrange ​the tens of

billions of transistors that make up chips, which can be 2,000

times smaller than the width of a strand of human hair.

In March, Synopsys ( SNPS ) introduced a technology it said would

pave the way toward AI agents taking over many of the tasks in

creating chips.