Advanced Micro Devices and Synopsys, a company that helps to implement complex semiconductor devices like APUs, CPUs and GPUs, this week signed a multi-year agreement that gives AMD access to a range of Synopsys DesignWare intellectual property on advanced 16nm/14nm and 10nm FinFET process technologies. In exchange, AMD transfers certain IP and engineering resources to Synopsys.

Under the terms of the agreement, AMD gains interface, memory compiler, logic library and analog intellectual property from Synopsys and will use it to develop future generations of chips to be made using 14nm/16nm as well as 10nm FinFET manufacturing processes. In addition, Synopsys hires approximately 150 AMD IP R&D engineers and gains access to AMD’s leading interface and foundation IP. While the move clearly saves AMD money, it makes it weaker in terms of resources, whereas Synopsys becomes stronger.

Synopsys is a leader in developing silicon-proven intellectual property for advanced process technologies. The company provides chip designers a broad range of high-quality IP for integration into system-on-chips (SoCs) and delivering expert technical support. This allows many companies, including AMD, to save time and money on development non-critical areas of chips.

AMD has a huge library of various complex IP used in advanced microprocessors and graphics processing units. Under the terms of the deal, AMD gets silicon-proven IP for the chips it will make in the next several years in exchange for interface and foundation IP as well as engineers. AMD claims that it will give it ability to “focus its valuable engineering resources on its ongoing product differentiation and IP reuse strategy”.

“Today’s announcement aligns with AMD’s continuing IP development strategy to focus our internal teams on designing the innovative 64-bit processor, graphics and peripheral IP that forms the foundation for our competitive differentiation, while leveraging Synopsys, the industry leader for cost-effective development of complementary standard IP components, for our future SoCs,” said Mark Papermaster, AMD senior vice president and chief technology officer. “We have partnered with Synopsys for tools and IP for more than a decade, and this expanded relationship is a great example of leveraging high-quality, standard IP for cost-effective reuse across multiple solutions.”

According to AMD, its cost efficiencies from these agreements are contemplated in the company’s 2014 quarterly non-GAAP operating expense guidance of approximately $420 million to $450 million.

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KitGuru Says: It looks like AMD has just transferred its fundamental IP and 150 R&D engineers to Synopsys in exchange for IP that it is going to use in the next four or five years. While the company did save a lot of money, it lost a lot of engineers and ability to develop certain technologies going forward. Does such business approach make sense? Maybe. But it looks like another form of asset-light strategy announced many years ago.

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