Activist investment firm Elliott Management has acquired a substantial stake in Synopsys Inc., a leading provider of software tools used in semiconductor chip design, according to people familiar with the matter.

Elliott plans to engage with Synopsys management to push the company to increase profitability from its software and services offerings. The investment firm is known for taking positions in technology companies and advocating for operational improvements and strategic changes.

Synopsys provides electronic design automation software and intellectual property used by semiconductor companies and electronics manufacturers to design and test chips. The company's tools are widely used across the industry for creating everything from mobile processors to automotive semiconductors.

The move comes as the semiconductor industry continues to experience strong demand across multiple sectors, including artificial intelligence, automotive electronics, and data center infrastructure. Design software companies like Synopsys have benefited from increased chip development activity as companies seek to create more specialized processors.

Elliott's involvement typically signals potential pressure for operational changes, cost optimization, or strategic initiatives aimed at boosting shareholder returns. The firm has a track record of engaging with technology companies to drive performance improvements and value creation.