Goldman Sachs analysts noted that a shortage of chip design engineers is creating a unique opportunity for Cadence Design Systems (CDNS) and Synopsys (SNPS) to increase their electronic design automation (EDA) revenues. They estimate this opportunity could be worth approximately $3.7 billion annually by 2030, a figure not currently reflected in market estimates.
As a result, Goldman has raised its price target for CDNS shares from $410 to $470, indicating a potential upside of 26% from the current price of $384.17. For SNPS, the 12-month target price is set at $600, although analysts caution about risks such as export restrictions and market share losses.
Additionally, the memory chip sector, crucial for consumer electronics and AI data centers, is experiencing price volatility amid concerns about sustainable AI demand. Despite this, industry leaders like Pat Gelsinger express confidence in the long-term demand for AI technologies.
Meanwhile, Taiwan Semiconductor Manufacturing Co. reported a significant year-on-year sales increase, further highlighting the ongoing growth in the semiconductor industry