Cadence Design Systems makes electronic design automation (EDA) software and semiconductor IP used by chip designers to develop, simulate, verify, and physically implement integrated circuits. Designing a modern chip is not possible without EDA tools—the complexity of placing billions of transistors, routing millions of connections, and verifying that a design functions correctly requires software that handles tasks no human could perform manually. Cadence and Synopsys are the two dominant EDA vendors globally.

AI chip design has expanded the scope and complexity of what EDA tools must handle. Modern AI accelerators are often multi-die systems—chiplets manufactured separately and integrated on a shared substrate. Designing these requires tools that can simulate the full package and verify electrical and thermal behavior across die boundaries. Cadence's 3DIC Compiler addresses this, and its adoption has grown as more chip companies move to chiplet-based AI architectures. At the same time, hyperscalers building custom AI ASICs have become significant Cadence customers.

Cadence generates over 70% of revenue from multi-year time-based license contracts, providing high revenue visibility. Revenue has grown 10–15% annually, and the company has launched AI-assisted features within its design tools that help engineers navigate increased complexity at leading-edge nodes. As AI chip architectures grow more complex—more chiplets, more packaging layers, more heterogeneous integration—the design task that Cadence's tools must support grows with it.