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Cadence Design Systems, Inc.
- EDA Software -
Category Directory
(408)
943-1234
2655
Seely Ave., Building 5
San
Jose, CA 95134
www.cadence.com
Sales
$1.1
billion
Business Description
Cadence Design Systems, Inc., or Cadence®, licenses electronic design
automation, or EDA, software, sells or leases hardware technology and
provides design and methodology services throughout the world to help
accelerate and manage customers’ electronic product development processes.
Our broad range of products and services are used by the world’s leading
electronics companies to design and develop complex integrated circuits, or
ICs, and personal and commercial electronic systems. We have approximately
4,800 employees, in approximately 60 sales offices, design centers and
research facilities located around the world.
Operating Segments
We manage our business through three operating segments: Products, Services
and Maintenance. The Products segment develops and markets our software and
hardware technologies to our customers. The Maintenance segment services the
ongoing, after-sale support requirements of those products through technical
support and software updates. The Services segment provides our customers
with educational services focused on training customers for the efficient
and effective use of our technologies, methodology services to assist
customers in optimizing the use of our technologies within their design
activities, and design services to develop complex ICs and other electronic
components for our customers. See “Competition” below and Note 19, Segment
Reporting, to our Consolidated Financial Statements for additional
information related to these operating segments.
Products
Through our Products segment, we offer one of the most comprehensive sets of
EDA products in the industry. Our products improve designer productivity and
design quality throughout the electronic design process. Product revenues
include all fees earned from granting licenses to use our software and sales
and leases of our hardware products, and exclude revenues derived from
Maintenance and Services. We offer customers three license types for our
software: perpetual, term and subscription. See “Software Licensing
Arrangements” below for additional discussion of our license types.
Product revenue represented 59% of our total revenue in 2003, 63% in 2002
and 58% in 2001.
Product Strategy
With the addition of emerging nanometer design considerations to the already
burgeoning set of traditional design tasks, complex SoC or IC design can no
longer be accomplished using a collection of discrete design tools. What
previously consisted of sequential design activities must be merged and
accomplished nearly simultaneously without time-consuming data translation
steps. We have formulated a design solution strategy that combines our “best
in class” design technologies into “platforms” for four major design
activities: functional verification, digital IC design, custom IC design and
system interconnect. The four Cadence design platforms are IncisiveTM
Functional Verification, EncounterTM Digital IC Design, Virtuoso® Custom
Design and Allegro® System Interconnect Platforms. In addition, we augment
these platform product offerings with a comprehensive set of design for
manufacturing products that span both the digital and custom IC design
flows. These four platforms, together with our design for manufacturing
products comprise our primary product lines.
Incisive Functional Verification Platform
The Incisive functional verification platform supports a unified
methodology, from design of the total system, to design-in of particular
ICs, to design of specific systems, for all design domains. Compared to
traditional simulation approaches, the Incisive platform provides faster
full-chip verification throughout the entire design cycle, which
significantly reduces total verification time.
The Incisive platform employs a single-kernel architecture that overcomes
fragmentation by unifying multiple verification techniques around a single
engine. It also provides support for open design and verification standards
as well as analog/mixed-signal verification. The same platform delivers
Palladium® hardware in-circuit emulation and simulation
acceleration-on-demand, transaction-level support, HDL analysis, coverage,
debug and analysis, and test generation. Not only is Incisive designed so
customers can adopt these technologies incrementally, it can also deliver
the speed and efficiency required to compress overall verification time. The
QuickCyclesTM capability allows customers to access Palladium simulation
acceleration and emulation products on a pay-as-you-go basis, either on the
customer site or remotely over a high-speed, secure network connection.
As part of the Incisive functional verification platform, Incisive
Conformal® provides a complete logic equivalence checking solution for
verifying that the RTL specification is equivalent to the final IC layout.
Conformal verifies a variety of circuits, including complex arithmetic
logic, datapath, memories, and custom logic.
Encounter Digital IC Design Platform
Our Encounter digital IC design platform employs a unified architecture for
full digital implementation of nanometer-scale designs. It is based on a
single user interface and unified in-memory data model, and was specifically
designed to analyze and optimize wiring throughout the design process. It is
comprised of the following core technologies:
• Encounter RTL Compiler, featuring global synthesis for timing closure,
which uses a patented set of global focus algorithms that maximize circuit
performance;
• First Encounter® Ultra, a silicon virtual prototyping system that assists
in managing the IC design process;
• NanoRouteTM Ultra, which uses graph-based routing technologies to
efficiently support variable-spacing, variable-width routes for nanometer
process technologies;
• CeltICTM signal integrity analyzer, which is used by leading silicon
foundries for ensuring that the chip designed with the Encounter platform
does not contain any fatal signal integrity defects; and
• Encounter Test SolutionsTM which identify opportunities for yield
improvements by accelerating defect identification, and by linking design
data with manufacturing data.
Unlike traditional “front-end/back-end” systems, the Encounter platform does
not require translations between common tasks such as placement, power
distribution, routing, and timing/crosstalk analysis. The
SoC EncounterTM configuration supports hierarchical designs, with full-chip
support for designs containing more than 50 million gates. (A gate is an
electronic switch that allows or prevents the flow of current in a circuit.)
Nano EncounterTM supports full-chip implementation for non-hierarchical
chips and blocks of up to 10 million gates.
Virtuoso Custom Design Platform
The Virtuoso custom design platform enables development of silicon-accurate
analog, custom digital, radio frequency and mixed-signal designs. With the
Virtuoso platform, custom design teams are able to deliver silicon-accurate
designs — while addressing the growing number of physical effects in
package, power grid, interconnect, devices, and substrate.
By using its advanced custom design methodology for custom/mixed-signal
design, the Virtuoso platform enables highly accurate design predictability
by ensuring that the circuit design representation will behave correctly in
the final manufactured silicon. The Virtuoso platform reduces design time by
providing:
• A specification-driven environment that automates the entire design
process;
• Multi-mode simulation (digital, analog and radio frequency) using a common
syntax, model, and equations;
• Fast custom layout technologies;
• Highly accurate electrical vs. physical effects analysis; and
• Physical design integration and silicon analysis for complex custom,
cell-based, and mixed custom designs using our Open AccessTM database.
Design For Manufacturing
The physical design of ICs requires detailed analysis and optimization to
ensure the design can be manufactured. Our Fire & Ice® QX products take the
designer’s representation of the IC and extract the physical properties of
the design to enable further analysis. Our SignalStorm®, VoltageStorm® and
ElectronStorm® products address nanometer design challenges associated with
on-chip distribution of power, timing and crosstalk effects. The Substrate
Noise Analyst product, designed for radio frequency, analog, and
mixed-signal ICs, provides a silicon-accurate model for detecting fatal
substrate coupling defects to enable chip integration. Our Assura products
perform design rule checking to ensure the proposed design meets the
requirements of the foundry’s manufacturing process rules. Our software and
services are designed to provide comprehensive, high-speed verification that
an IC will perform as designed, taking into account the complex effects of
nanometer semiconductor physics.
Allegro System Interconnect Design Platform
The Cadence Allegro system interconnect design platform enables
collaborative design of high-performance interconnect across the domains of
IC, package and PCB, reducing cost and time to market. The system
interconnect — between I/ O buffers and across ICs, packages and PCBs — can
be optimized through the platform’s co-design methodology, reducing both
hardware costs and design cycles. The Allegro platform’s constraint-driven
methodology includes advanced capabilities for design capture, signal
integrity and physical implementation. The Allegro co-design methodology is
supported by our Encounter and Virtuoso platforms, enabling effective design
chain collaboration. Silicon design-in kits speed time to market by allowing
IC companies to shorten new device adoption time and allowing systems
companies to accelerate PCB system design cycles.
The System Interconnect product group includes the Allegro system
interconnect platform and the OrCAD product line of PCB design products that
is priced for the individual user. The OrCAD product line is marketed
exclusively through a worldwide network of value added resellers.
Verification and Application Specific Programming, or ASP, Services
We offer verification and ASP services through Time-to-Market Engineering,
or TtME, services. Our TtME team provides customers with consulting
services, project services and/or complete turnkey services for verification
acceleration and system emulation. QuickCycles allows customers to access
Palladium simulation acceleration and emulation products on a pay-as-you-go
basis, either on the customer internet site or remotely over a high-speed,
secure network connection.
Third Party Programs and Initiatives
We recognize that certain of our customers may also use internally-developed
design tools or design tools provided by other EDA companies. We support the
integration of third party design products through our Open Access
Initiative and Connections® Program. Open Access is a full-featured EDA
database that supports access and manipulation of its internal EDA data via
a fully documented and freely available programming interface. This provides
an open application program interface, or API, through which applications
developed by our customers, by their other EDA vendors, or by university
research groups can all operate within a single database and with Cadence
platforms. We have contributed the open access database to the Open Access
Coalition, which is operated by the Silicon Integration Initiative, an
organization of EDA, electronic system and semiconductor industry leaders
focused on improving productivity and reducing cost in creating and
producing integrated silicon systems. The Connections Program provides other
EDA companies with access to our products to ensure that our products work
well with those third party tools. Over 120 EDA providers are members of the
Connections Program. Additionally, we collaborate throughout the silicon
design chain with leading IP, silicon foundry, and library provider partners
to support customer-owned tooling, or COT, solutions for our customers. We
also assist and support library providers in the integration of our design
and verification products and model formats into COT library solutions. In
addition, we work with vendors of Application Specific Integrated Circuits,
or ASICs, to ensure predictable and smooth handoff of design data from
mutual customers to ASIC implementation. These relationships are integral to
providing complete design chain solutions to IC and electronic systems
designers who depend on coordinated offerings from multiple suppliers.
Maintenance
The Maintenance segment comprises our customer support activities for our
software and hardware products. We provide technical support to our
customers to facilitate their use of our products. A high level of customer
service and support is critical to the adoption and successful use of our
products, which results in a close link between the Product and Maintenance
segments.
We have a global customer support organization and specialized field
application engineering teams located in each of our operating regions, to
provide assistance to customers where and when they need it.
Standard maintenance support includes three major components: our Sourcelink®
online support portal, which provides 24 hour access to real-time technical
information on our products; contact center support — telephone, email and
web access to our support engineers; and software updates — periodic updates
with regression-tested critical fixes and updated functionality available
via CDs or secure internet download.
Maintenance is offered to customers as an integral, non-cancelable component
of our subscription license agreements, or as a separate agreement subject
to annual renewal for our term and perpetual license agreements. During the
recent downturn in the electronics industry, some customers facing
constrained budgets elected not to renew maintenance agreements associated
with license agreements with us.
Some of our customers have relocated, or expanded the presence of their
design teams away from their headquarters or historical locations to less
expensive locations in emerging growth regions. Accordingly, to provide the
most responsive and effective support for our customers, we expect to
continue to expand the presence of our own support and application
engineering teams into emerging growth regions around the world.
Maintenance revenues represented 29% of our total revenue in 2003, 26% in
2002 and 24% in 2001. Maintenance revenue in 2004 will be predominately
generated from backlog.
Services
We offer a number of fee-based services, including education and engineering
services related to design and methodology services. These services may be
sold and performed in conjunction with the sale, lease or license of our
products or sold separately.
Services revenue represented 12% of our total revenue in 2003, 11% in 2002
and 18% in 2001.
Education Services
Our educational services include Internet, classroom and custom courses, the
content of which ranges from how to use the most recent product features to
instructions in the latest design techniques.
Design and Methodology Services
We offer engineering services and reusable design technologies to aid
customers with the design of complex ICs. We focus our offerings primarily
on SoC devices, including both Application Specific Integrated Circuits, or
ASICS, and Application Specific Standard Parts, and on analog and mixed
signal ICs. The customers for these services primarily consist of
semiconductor and systems companies developing products for the
communications, computing, and consumer market segments. We offer
engineering capabilities to assist customers from product concept through
volume manufacturing.
We also make our design intellectual property, or design IP, portfolio
available to customers as part of our complete technology and services
solution. These reusable design and methodology components enable us to more
efficiently deliver our services, and allow our customers to reduce the
design complexity and time to market for the development of complex SoCs.
In our design and methodology service practices, we leverage our cumulative
experience and knowledge of design practices across many customers and
different design environments to improve our own service teams’ and our
customers’ productivity. We work with customers using outsourcing,
consultative and collaborative models depending on their projects and needs.
Our Virtual Computer-Aided Design, or VCAD, model enables our engineering
teams at one or more of our locations to virtually work “side-by-side” with
our customers’ teams located elsewhere during the course of their design and
engineering projects through a secure private network infrastructure.
Through collaboration with our customers, we are able to design advanced
ICs, gaining direct and early visibility to industry design issues that may
not be addressed adequately by today’s design automation solutions. This
enables us to accelerate the development of new software technology to meet
the market’s current and future design requirements.
Competition
The competitive conditions for our Products and Maintenance segments are
closely related. In these segments, we compete in the EDA market primarily
with three other significant companies: Synopsys,
Inc., Mentor Graphics Corporation and Magma Design Automation, Inc. In
2002 and 2003, Synopsys, Inc. acquired two significant companies, Avant!
Corporation and Numerical Technologies, Inc., and the combined companies
offer a broader product range than any of them did before the mergers. We
also compete with numerous smaller EDA companies, with manufacturers of
electronic devices that have developed or have the capability to develop
their own EDA products, and with numerous electronics design and consulting
companies. We generally compete on the basis of product quality and
features, integration in a platform or compatibility with other tools, price
and payment terms and maintenance offerings.
Our Maintenance business flows directly from the Products business. The
competitive issues associated with the Maintenance segment are substantially
the same as those for the Products segment in that every maintenance
contract is the direct result of a product contract, and once we have
entered into a product contract, maintenance is generally purchased by the
customer to ensure that the customer will receive access to bug fixes and
service releases, as and when they are made available, and other continued
support.
Certain competitive factors in the Services business as described in this
annual report on form 10-K differ from those of the Products and Maintenance
businesses. We compete less with other EDA companies in this business
segment, and more with independent design service businesses. These
companies vary greatly in focus, geographic location, capability, cost
structure and pricing. In addition, manufacturers of electronic devices may
be reluctant to purchase services from independent vendors, such as Cadence,
because they wish to promote their own internal design departments. We
compete with these companies by focusing on the design of complex analog and
digital ICs. It is our strategy to use design services as a differentiator
to further promote our Products and Maintenance businesses.
Ticker
CDN
EDA
Companies in the Directory
Cadence
Synopsys
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