Cadence Design Systems


Cadence Design Systems, Inc. is an American multinational technology and computational software company headquartered in San Jose, California. Initially specialized in electronic design automation software for the semiconductor industry, currently the company makes software and hardware for designing products such as integrated circuits, systems on chips, printed circuit boards, and pharmaceutical drugs, also licensing intellectual property for the electronics, aerospace, defense and automotive industries.

History

1983–1999

Founded in 1983 in San Jose, California, Cadence Design Systems began as an electronic design automation company named Solomon Design Automation. SDA's cofounders included James Solomon, Richard Newton, and Alberto Sangiovanni-Vincentelli. Cadence was formed by the merger of SDA and ECAD. A public company, ECAD had been co-founded by Ping Chao, Glen Antle, and Paul Huang in 1982. Cadence Design Systems was officially formed through the 1988 merger of SDA and ECAD, with Joseph Costello appointed both CEO and president of the newly combined company. After the merger, Cadence began trading on the New York Stock Exchange and Costello oversaw further mergers and acquisitions.
In 1989, the company acquired Gateway Design Automation for $72 million. In 1990 it acquired Automated Systems Inc., and in doing so added "board design to its existing line of chip design software." In 1991, Cadence acquired its rival Valid Logic Systems for around $200 million, its biggest acquisition yet. The revenues of the combined company were $390 million, according to the New York Times.
In 1996, Cadence acquired High Level Design Systems, at which point Cadence had 3,300 employees and $742 million in annual revenue. Following the resignation of Cadence's original CEO Joe Costello in 1997, Jack Harding was appointed CEO. Ray Bingham was named CEO in 1999. Cadence purchased Ambit Design Systems for $260 million, which made tools for system-on-a-chip technology, in 1998, and OrCAD Systems in 1999. Cadence acquired Quickturn Design Systems in 1999, preventing a hostile takeover attempt by Mentor Graphics.

2000–2019

Under urging by executives such as Jim Hogan and executive vice president Penny Herscher, between 2001 and 2003, Cadence purchased a number of implementation tools through acquisition, such as Silicon Perspective, Verplex, and Celestry Design. The acquisitions were apparently in part to counter the 2001 purchase of Avanti by Synopsys, as Synopsys had become their primary market rival. In 2004, Mike Fister became Cadence's new CEO and president, with Ray Bingham becoming chairman. The former chairman, Donald L. Lucas, remained on the Cadence board. Between 2004 and 2007, Cadence purchased four companies, including the software developer Verisity, and in 2006, it spent $1 billion in stock buybacks.
In 2007, Cadence announced it would be introducing a new chip-making process that laid wires diagonally as well as horizontally and vertically. In June 2007, Cadence had a market value of around $6.4 billion. That year, Cadence was rumored to be in talks with Kohlberg Kravis Roberts and Blackstone Group regarding a possible sale of the company. Cadence withdrew a $1.6 billion offer to purchase Mentor Graphics in 2008. Also that year, Cadence's board appointed Lip-Bu Tan as acting CEO, after the resignation of Mike Fister; Tan had served on the Cadence board of directors since 2004. In January 2009, the board of directors of Cadence voted unanimously to confirm Lip-Bu Tan as president and CEO. In 2011, it purchased Altos Design Automation. Subsequent notable acquisitions included Cosmic Circuits and Tensilica in 2013, Forte Design Systems in 2014, and the AWR Corporation in 2019.

2020–2025

Cadence had 9,300 employees and annual revenue of $3 billion in 2021. Most of its revenue came from licensing its software and intellectual property. In April 2021, following a Washington Post report on the use of Cadence and Synopsys technology in the People's Liberation Army's military-civil fusion efforts, U.S. legislators Michael McCaul and Tom Cotton requested that the United States Department of Commerce tighten controls on the sales of semiconductor manufacturing software. On December 15, 2021, Anirudh Devgan assumed the role of Cadence president & CEO, after having been named Cadence president in 2017. Lip-Bu Tan retired as CEO and became executive chairman and left this position and the board in May 2023. In 2021, Cadence launched an artificial intelligence platform to streamline processor development.
Although most of Cadence's customers for decades were "traditional semiconductor firms," around 40% of Cadence's revenue by 2022 came from customers who were "systems" oriented, or seeking products tailored for various industries that utilized chips in a central role. Cadence was also increasingly designing customized chips for clients and having them manufactured by third parties such as Taiwan Semiconductor Manufacturing, a practice which had become more popular in the face of worldwide chip shortages and shipping issues, according to Reuters. By late 2022, Cadence had clients such as Tesla and Apple Inc. Cadence acquired OpenEye Scientific Software for $500 million in September 2022, rebranding the company OpenEye Cadence Molecular Sciences and making it into a business unit. OpenEye signed Pfizer as a software client in October 2023.
Cadence purchased several businesses from Rambus in 2023. In February 2024, Cadence "quietly stepped into the supercomputer business," according to TechRadar, when it unveiled the M1, its own supercomputer designed to run computational fluid dynamics while utilizing AI. In June 2024, Cadence purchased BETA CAE Systems.
In January 2025, Cadence announced the acquisition of Secure-IC, an embedded security IP platform provider; the acquisition is expected to close by mid-2025, following the usual regulatory approvals and other closing conditions, and be immaterial to 2025 revenue and earnings.
In mid-2025, the Trump administration briefly paused the issuing of licenses for exports of American EDA software to China, including Cadence products. In July 2025, it was announced that Cadence would plead guilty to violating U.S. export controls and pay US$140 million.
On September 4, 2025, Cadence Design Systems announced it would acquire the design and engineering business of Stockholm-based Hexagon AB for €2.7 billion in a stock-and-cash deal. The acquisition includes Hexagon's MSC Software business, a provider of engineering simulation and analysis software and workflows.

Products

Originally known as a creator of electronic design automation software, the company currently develops software, hardware and intellectual property used to design chips, chiplet-style products, and printed circuit boards, while also selling hardware systems that run its chip design software.
It also has tools for "electromagnetics, thermal and computational fluid dynamics in the high-tech electronics, aerospace and defense and automotive sectors," and according to Investor's Business Daily in 2023, it specializes in products for fields such as "artificial intelligence and machine learning, cloud computing, 3D technology, and AI-enabled big data analytics." Among market applications are "hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and health care."

Integrated circuit software

The company develops a number of technologies for creating custom integrated circuits. For example, its Virtuoso Platform, later renamed Virtuoso Studio, incorporates tools for designing full-custom integrated circuits. In 2019, Cadence introduced its Spectre X parallel circuit simulator, so that users could distribute time- and frequency-domain simulations across hundreds of CPUs for speed. Cadence also offers AWR, a radio frequency to millimeter wave design environment for designing 5G/wireless products. AWR is used for communications, aerospace and defense, semiconductor, computer, and consumer electronics.

Digital implementation and signoff

Cadence has a number of digital implementation and signoff tools, including Genus, Innovus, Tempus & Voltus, among others. In 2020, Cadence integrated its Innovus place and route engine and optimizer into Genus Synthesis. Stratus is Cadence's high-level synthesis tool, and is used to create RTL implementations from C, C++, or SystemC code. Other formal verification and signoff tools include Conformal Equivalence Checker, Joules RTL Power Solution, Quantus Extraction Solution, and Cadence's Modus DFT Software Solution.

System verification

Cadence has developed a number of formal verification products for chip design. JasperGold is a formal verification tool, initially introduced in 2003 and upgraded with machine learning in 2019. is a verification management tool for tracking the verification process. Cadence announced Perspec System Verifier in 2014 for defining and verifying system-level verification scenarios, with Perspec made compatible with the Accellera Portable Test and Stimulus Standard several years later. Introduced in 2017, Cadence's parallel simulator Xcelium is based on a multi-core parallel computing architecture.

Hardware emulation

In 2015, Cadence announced the Palladium Z1 hardware emulation platform, for verifying billion-gate designs. which was based on emulation technology from Cadence's 1998 acquisition of Quickturn. Cadence announced Palladium Z2 in 2021 as a successor to the Z1 platform with improved performance.
The Protium FPGA prototyping platform was introduced in 2014, followed by the Protium S1 in 2017, which was built on Xilinx Virtex UltraScale FPGAs. Protium X1 rack-based prototyping was introduced in 2019, which Cadence claimed supported a 1.2 billion gate SoCs at around 5 MHz. with Palladium S1/X1 and Protium sharing a single compilation flow. In 2021, Protium X2 was announced; Cadence claimed a 1.5X performance and 2X capacity improvement over Protium X1.