Here's How Cadence Is Set To Gain Despite Competition From Tesla, Apple
Cadence Design Systems Inc (NASDAQ: CDNS) is betting on growth from automakers and other chip users strapped by the global supply crisis, Reuters reports. Cadence is a microchip design software maker.
The chipmakers face mounting competition from chips made by Tesla Inc (NASDAQ: TSLA) and Apple Inc (NASDAQ: AAPL).
The report added that Cadence and rivals Synopsys Inc (NASDAQ: SNPS) and Siemens EDA are at the center of a microchip industry shift.
Cloud computing providers, software makers, and others who traditionally have bought semiconductors from a few big companies now want to draw up their chips own in-house.
The newer breed of Cadence's "systems" customers, who dream up total products in which chips play a central role, now account for ~40% of Cadence's revenue, the report quoted Jay Vleeschhouwer, head of software research for Griffin Securities.
Cadence has branched out to offer those customers software that goes beyond chip design to helping fit their custom chip into a complete product.
Cadence has acquired apps for tasks like packaging finished chips to put onto circuit boards and ensuring the chips will not overheat and melt in daily use.
The allure of such functions "extends to automotive, aerospace, industrial equipment, all of the makers of products" in which chips eventually reside, the report cited Joe Vruwink, an analyst with Robert W. Baird & Co.
Price Action: CDNS shares traded lower by 3.45% at $156.17 on the last check Tuesday.
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