Core Insights - Cadence Design Systems, Inc. (CDNS) has a long-standing and strengthening partnership with Taiwan Semiconductor Manufacturing Company (TSMC) to enhance chip design and verification processes [1][2] - The collaboration focuses on AI-driven advanced-node designs and 3D-ICs, addressing the increasing demand for sophisticated silicon solutions [2][4] - Recent advancements in chip design automation and IP highlight the impact of the collaboration, particularly in AI and high-performance computing (HPC) [3][4] Partnership Expansion - In April 2025, Cadence announced an expansion of its partnership with TSMC to accelerate time-to-silicon for advanced-node and 3D-IC technologies, integrating certified design flows and silicon-proven IP [2][9] - The collaboration is set to include the upcoming A14 process, with the first Process Design Kit (PDK) expected to be released later this year [5] Technological Advancements - Cadence's AI-driven design solutions enhance power, performance, and area (PPA) optimization, with tools like the JedAI platform and Cerebrus Intelligent Chip Explorer integrated with TSMC's N2 process [6][7] - Innovations in 3D-IC design include bump connection automation and multi-chiplet implementation, complementing TSMC's 3DFabric technology [7] IP Development - Cadence is delivering advanced solutions on TSMC's N3P technology, including the industry's first HBM4 IP and high-speed memory interfaces, addressing critical bottlenecks in AI compute systems [8][10] - The company has expanded its IP portfolio through acquisitions, including Secure-IC and Arm's Artisan foundation IP business, enhancing its offerings for advanced process nodes [10] Competitive Landscape - Cadence faces competition from other EDA companies like Synopsys, ANSYS, and Siemens AG, as customers focus on cost efficiencies and supplier relationships [12]

Global EDA Industry Performance - The global EDA industry is projected to grow by 11% year-on-year in Q4 2024, reaching $4.9 billion, despite a weak performance in the Chinese market [3][4] - The EDA software industry is characterized by high technical barriers, talent reserves, user collaboration, and significant capital scale, with a market concentration exceeding 70% among the top three companies: Cadence, Synopsys, and Siemens EDA [5] Growth Drivers in EDA - The increasing demand for edge computing and high-performance computing (HPC) chips is driving the need for more complex and automated EDA solutions [6] - The rise of cloud solutions facilitates seamless collaboration and enhances accessibility for global design teams [6] - The integration of AI and machine learning algorithms into workflows is optimizing design accuracy and efficiency, reducing costly errors, and accelerating time-to-market [6] Segment Performance - CAE (Computer-Aided Engineering) revenue grew by 10.9% to $1.6969 billion [7] - IC physical design and verification saw a 15.4% increase, reaching $797.9 million [7] - PCB & MCM (Printed Circuit Board & Multi-Chip Module) revenue increased by 15.9% to $476.2 million [7] - Semiconductor IP (SIP) revenue grew by 7.9% to $1.7607 billion, with some companies reporting declines [7] - Service revenue increased by 11% to $195.6 million, reflecting strong design demand amid talent shortages [7] - IC packaging design revenue surged by 70%, indicating a significant rise in advanced packaging demand [7] AI's Role in EDA - EDA vendors are leveraging AI to optimize software engines, processes, and workflows, which is crucial for scalable and reliable outcomes [8] - AI applications in EDA include automating repetitive tasks, enhancing design optimization, and providing intelligent assistance through generative AI [11][12] - AI-driven tools can significantly reduce design cycles and improve accuracy, as demonstrated by Synopsys' AI-driven EDA tools [11] Future Outlook - The emergence of Chiplet technology is transforming chip design and manufacturing paradigms, necessitating new tool support for architecture exploration and signal integrity analysis [13] - EDA tools must evolve to support heterogeneous integration design, with companies like Synopsys and Cadence developing specialized tool suites for Chiplet design [13][15] - The collaboration between EDA tools and IP design capabilities will be critical for future competitiveness, as traditional IP markets face saturation [14]