![This is Matt Reustle and today we are breaking down Cadence Design Systems. We cover the value chain of semiconductors, the evolution of Cadence and the EDA market, and how Cadence has been able to mitigate the cyclical nature of the industry over the last decade.<br /><br />I'm joined by two well-known tech investors and experts in the semiconductor space, Brinton Johns and Jon Bathgate of NZS Capital.<br /> <br />For the full show notes, transcript, and links to the best content to learn more, check out the episode page here: https://www.joincolossus.com/episodes/93241601/johns-cadence-software-behind-semiconductor-design<br /> <br />-----<br /> <br />Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.<br /> <br />Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.<br /> <br />Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss<br /> <br />Show Notes<br />[00:00:00] - Introduction<br />[00:03:15] - [First question] - Everyday products that Cadence helps bring to life<br />[00:07:28] - The rise of Cadence and the origins of the semiconductor industry <br />[00:10:26] - Major players in the semiconductor space back in the 80s <br />[00:12:13] - Going from plan, to chip, to production<br />[00:16:58] - The life cycle of a chip and the cost to design one <br />[00:19:19] - Differences between software design and embedded software <br />[00:21:25] - The history of Cadence and the size and scope of their business today <br />[00:28:05] - Existing customer base and how diversified they are<br />[00:30:55] - What a contract actually looks like between Cadence and a customer<br />[00:35:05] - Protection, off-the-shelf IP blocks and custom IP <br />[00:35:53] - Cadence’s revenue growth, important metrics, and their KPIs<br />[00:37:03] - How correlated their revenue is to semiconductor cycles<br />[00:39:30] - Unit economics and the margin profile of the business<br />[00:42:13] - Contributing factors to growth and thoughts on pricing<br />[00:45:46] - Benefits of scale and what they like to see as investors from their R&D spend<br />[00:48:12] - Risks and competitors that may threaten Cadence’s success<br />[00:50:22] - Potential scenarios where the ecosystem becomes more vertically integrated<br />[00:52:56] - What would drive a 10x growth for Cadence in next five years<br />[00:54:58] - Things that would affect their growth in the next five years <br />[00:57:38] - Lessons for investors when studying Cadence<br />[00:59:15] - How they navigated the pandemic and how it impacted their business<br /><br />#businessbreakdowns #cadence #podcasts](https://media.thebusinessprofessor.com/wp-content/plugins/youtube-feed-pro/img/placeholder.png)
This is Matt Reustle and today we are breaking down Cadence Design Systems. We cover the value chain of semiconductors, the evolution of Cadence and the EDA market, and how Cadence has been able to mitigate the cyclical nature of the industry over the last decade.
I’m joined by two well-known tech investors and experts in the semiconductor space, Brinton Johns and Jon Bathgate of NZS Capital.
Show Notes
[00:00:00] – Introduction
[00:03:15] – [First question] – Everyday products that Cadence helps bring to life
[00:07:28] – The rise of Cadence and the origins of the semiconductor industry
[00:10:26] – Major players in the semiconductor space back in the 80s
[00:12:13] – Going from plan, to chip, to production
[00:16:58] – The life cycle of a chip and the cost to design one
[00:19:19] – Differences between software design and embedded software
[00:21:25] – The history of Cadence and the size and scope of their business today
[00:28:05] – Existing customer base and how diversified they are
[00:30:55] – What a contract actually looks like between Cadence and a customer
[00:35:05] – Protection, off-the-shelf IP blocks and custom IP
[00:35:53] – Cadence’s revenue growth, important metrics, and their KPIs
[00:37:03] – How correlated their revenue is to semiconductor cycles
[00:39:30] – Unit economics and the margin profile of the business
[00:42:13] – Contributing factors to growth and thoughts on pricing
[00:45:46] – Benefits of scale and what they like to see as investors from their R&D spend
[00:48:12] – Risks and competitors that may threaten Cadence’s success
[00:50:22] – Potential scenarios where the ecosystem becomes more vertically integrated
[00:52:56] – What would drive a 10x growth for Cadence in next five years
[00:54:58] – Things that would affect their growth in the next five years
[00:57:38] – Lessons for investors when studying Cadence
[00:59:15] – How they navigated the pandemic and how it impacted their business