Lip-Bu Tan talks about the challenges and opportunities facing the EDA sector

3 min read

Businesses like having momentum and Cadence Design Systems is certainly generating its fair share. From the launch of new products to company acquisitions, as well as deepening its relationship with key customers and ecosystem partners, it would be fair to say that it is almost unrecognisable from the business of six years ago.

Then it was perceived as struggling to keep pace with process technology developments and to be operating in a stagnant market with little growth.

By contrast, the Cadence of today is pushing new tools for advanced process nodes, has established partnerships with some of the industry's main players – from ARM and Intel to TSMC – and has grown its IP business significantly.

The transition from a laggard to a leader in six years coincides with the tenure of Lip-Bu Tan, who was appointed the company's president and CEO in 2009. New Electronics managed to catch up with him at June 2015's imec Technology Forum in Brussels, where he was speaking about designing for 'smarter living' and the need for advanced design technologies.

"The types of electronic systems that will support and enable smarter living and working will require a new approach to design; one that will require much greater collaboration among companies providing EDA services, IP and chip fabrication," he argues.

"Chip design complexity is growing, as are time to market pressures and the development of advanced nodes remains very challenging," Tan says.

Over the last six years, Cadence has worked hard to reposition itself to meet the needs of a changing global market. Starting with the concept of EDA360, Cadence now offers what it describes as System Design Enablement.

"EDA360 was just that – a concept – but the disruption we identified then is with us today. It's a reality. System providers have very big challenges to contend with and have different needs from the customers we traditionally worked with.

"Today, we offer hardware/software co-design and co-verification tools, as well as design and verification suites for high level abstractions as part of our integrated tool set," Tan explains. "We are more application driven and need to be able to help companies look at the wider system, whether that is the IP, the power envelope, signal integrity or the PCB."

Earlier this year, the company strengthened its portfolio of tools with the launch of Innovus, a next generation digital implementation system said to be capable of improving PPA – power, performance and area – by 10 to 20% on 16/14/10nm FinFET processes, as well as on established process nodes.

"Innovus has been well received by customers," Tan believes, "and, together with Tempus, Voltus and Quantus QRC, we now have a much broader range of tools."

IP has become an increasingly important part of the company's System Design Enablement strategy.

"We've made a number of acquisitions in this space and have a team of more than 1000 working on IP," Tan explains. "IP now accounts for around 11% of our revenues and growth remains in double digits. We've entered into agreements with a number of companies and provide IP across multiple product lines."

Cadence's acquisition two years ago of Tensilica, a configurable processor firm with product in smartphones and tablets, was seen as a significant move.

"IP is very important to Cadence," says Tan. "Today, we offer memory IP, verification IP and design IP and our silicon design IP includes controllers, serdes layer and device drivers. But, despite that, our core EDA business remains the foundation of our corporate strategy. Our emerging IP business, however, is growing rapidly, which means we can provide our customers with highly differentiated IP."

Finding good management and talent are always issues, Tan suggests.

"We need to inspire people if we want to attract 'top talent' and we have a very active global university programme that engages directly with academics and students. But it can be hard to recruit talented individuals when you are up against the likes of Google and Facebook. "We need new blood and new ideas."

When it comes to the Internet of Things, the winners and losers will be defined by the speed by which they are able to get new product to market, according to Tan.

"Interoperability is crucial and you have to be able to work closely with customers, IP partners and foundry partners," he says.

Alongside his role as president and CEO of Cadence, Tan is chairman of Walden International, a venture capital firm he founded in 1987.

"From the perspective of being an investor, everyone is looking at IoT, data management and the cloud and there are many opportunities for investors but, perhaps, more so for those looking at the service side."

At the macro level, Tan is convinced that there are some areas of strength, as well as some obvious challenges going forward.

"The environment is mixed – alongside economic concerns, I'm worried by the growing consolidation taking place in the semiconductor industry. Despite that, we are seeing real opportunities in markets like video, wearable electronics, the Internet of Things, the cloud, infrastructure and automotive.

"There's a lot of system level engagement and design activity," he concludes, "but not nearly enough."

Lip-Bu Tan

Lip-Bu Tan has served as President and CEO of Cadence Design Systems since January 2009 and has been a member of the Cadence Board of Directors since February 2004. He also serves as chairman of Walden International, a venture capital firm he founded in 1987. Prior to founding Walden, Tan was Vice President at Chappell & Co. and held management positions at EDS Nuclear and ECHO Energy.