July 7, 2026, (Inside AI) — Synopsys, a major U.S. chip design software firm, is discontinuing a suite of manufacturing process control tools used by top semiconductor makers, six sources told Reuters. The move, part of a pivot toward higher-margin AI design, affects products like the Equipment Engineering System (EES) and Fault Detection and Classification (FDC).
In April and May, Synopsys notified over 10 chipmakers—including Samsung Electronics, SK Hynix, Kioxia, and Qorvo—about the “end of life” decision. The company will stop providing new versions and only fulfill existing maintenance obligations, two sources said. A Synopsys spokesperson confirmed the discontinuation of “certain manufacturing analytics products” without naming them, emphasizing they are “older diagnostic tools not in our customers’ critical paths of production.”
The EES and FDC software act as the central nervous system of semiconductor fabs, monitoring for anomalies that could lead to costly defects. Synopsys acquired the EES technology from South Korea’s BISTel in 2021. The company has already laid off a few dozen staff, three sources said, with one adding that talks on maintenance obligations should conclude by July.
The AI Pivot and Shifting Industry Dynamics
Synopsys is reallocating engineering resources to high-margin AI design tools, a strategy accelerated by its $35 billion acquisition of Ansys in 2025. The spokesperson stated the company continues to invest in new manufacturing analytics capabilities. However, the decision reflects a broader industry trend where chipmakers increasingly develop in-house software, reducing reliance on third-party vendors.
Read: Microsoft and NVIDIA Unveil RTX Spark: 1 Petaflop AI Chip for Windows PCs
Two sources noted that Samsung is building its own tools, which impacted the competitiveness of Synopsys’ offerings. A Samsung spokesperson confirmed the end-of-life decision, stating the company has “compatible alternatives” and expects “no negative impact on production.” SK Hynix declined to comment, while Kioxia and Qorvo did not respond.
One source warned that discontinuing the software risks production yield declines since it requires constant updates and patching. However, four other sources said they do not expect any impact on major chipmakers’ output. The divergence highlights the complexity of fab operations, where software is deeply integrated but can be replaced with sufficient lead time and investment.
Data Sensitivity and the Road Ahead
The move was partly driven by data-sharing challenges. Enhancing the EES service required chipmakers to share tightly held manufacturing data, which some clients were reluctant to do, two sources said. This friction, combined with the rise of in-house solutions, made the business less attractive for Synopsys.
Synopsys has long been a key supplier of electronic design automation (EDA) software, used to arrange billions of transistors on chips smaller than a strand of human hair. In March, the company unveiled technology aimed at enabling AI agents to take over many chip design tasks, signaling its strategic focus.
Read: OpenAI and Broadcom Unveil Jalapeño: Custom AI Chip for LLM Inference at Gigawatt Scale in the U.S.
The discontinuation underscores a pivotal moment in the semiconductor software industry. As AI-driven design becomes paramount, legacy fab control tools are being phased out, forcing chipmakers to adapt. Whether this creates short-term disruptions or accelerates innovation remains to be seen, but the shift is unmistakable.
