This paper focuses on SIMD processor synthesis and proposes a SIMD instruction set/functional unit synthesis algorithm. Given an initial assembly code and a timing constraint, the proposed algorithm synthesizes an area-optimized processor core with optimal SIMD functional units. It also synthesizes a SIMD instruction set. The input initial assembly code is assumed to run on a full-resource SIMD processor (virtual processor) which has all the possible SIMD functional units. In our algorithm, we introduce the SIMD operation decomposition and apply it to the initial assembly code and the full-resource SIMD processor. By gradually reducing SIMD operations or decomposing SIMD operations, we can finally find a processor core with small area under the given timing constraint. The promising experimental results are also shown.