Synopsys lands over $1 billion multi-year custom silicon agreement with Amazon Web Services

SNPS and Amazon Web Services said on Wednesday that Amazon's cloud unit has signed a multi-year deal worth more than $1 billion to license chip design intellectual property from Synopsys. Synopsys named AMZN the lead customer for its expanding line of application-optimized silicon IP and said the agreement moves that business toward a license-plus-royalty model, in which returns grow as production volumes grow. The announcement landed on the same day as Synopsys' 2026 Investor Day, and Synopsys shares rose after the news.

Synopsys is best known for its chip design software, but it also licenses blueprints for parts of chips, a business that brought in $1.75 billion in revenue in its most recent fiscal year and competes with ARM. The AWS deal focuses on blueprints optimized for specific types of chips. AWS designs its own Graviton processors, Trainium AI chips and Nitro chips, but the two companies did not specify which AWS chips will use Synopsys designs. As part of the agreement, Synopsys will also adopt AWS computing and storage services and Amazon Bedrock for its own AI applications, extending a collaboration that dates back more than 15 years.

For Amazon, the deal reinforces a long-running custom silicon strategy; Peter DeSantis, an Amazon senior vice president, said the company "has invested in custom silicon for more than a decade". For Synopsys, it is a large anchor contract for a higher-value IP tier. What to watch: how Synopsys reports the deal's revenue cadence given that the total is stated only as more than $1 billion with no annual split, how much of the value depends on royalties tied to AWS production volumes, and whether other hyperscalers designing their own chips sign similar application-optimized IP agreements.