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 What Would Joe Do?
Peggy Aycinena
Peggy Aycinena
Peggy Aycinena is a freelance journalist and Editor of EDA Confidential at She can be reached at peggy at aycinena dot com.

Cadence: The Best of Times

November 30th, 2017 by Peggy Aycinena

Of all the stories associated with Cadence Design Systems
, the saga of Lip-Bu Tan might be considered the most unlikely. After all, this is the company that launched one of the most flamboyant CEOs in the history of EDA, followed by one of the most outspoken, then one of the least prepared given his non-tech provenance, and finally one of the most distinctly over-paid in the history of the industry and Silicon Valley.

And all of that even before the corporate cataclysm of 2008. Few at the company in the fall of that year may have noticed the economy teetering on a cliff, because they were too busy tracking unbelievable developments within their own firewall.

On October 15, 2008, a thorough house-cleaning gutted the executive suite: The CEO, all EVPs, and a smattering of others were out, leaving the company leaderless and without an apparent rudder. Instantly the company stock tanked and more than a dozen shareholder lawsuits erupted from that special place from whence such things spring as spontaneously as lawyers after an ambulance.

Into this chaos stepped Lip-Bu Tan. Admittedly, he was no stranger to Cadence having been on the board for several years at that point, but was neither chairman like Stanford’s John Shoven, nor an EDA household name like Berkeley’s Alberto Sangiovanni-Vincentelli.

Also surprising: On paper Tan looked more quintessential VC than quintessential CEO, given his track record founding and managing Walden International’s $2 billion investment portfolio. Nonetheless, it was Lip-Bu Tan’s name that suddenly appeared in the press releases announcing the new Interim CEO.

That was nine years ago.

Since then, there has been lots of water under the bridge: The Great Recession, EDA 360, multiple high-profile acquisitions – including Denali [2010], Sigrity [2012], Tensilica [2013], Forte [2014], and Jasper [2014] – major consolidations have extinguished the entrepreneurial ecosystem in EDA, Synopsys has emerged as the industry behemoth, Mentor Graphics has been acquired by Siemens, and buzz words like DFM, ESL, killer app, and verification have been replaced by IoT, AI, machine learning, and edge computing.

Yet still Tan leads the team. He became permanent CEO in January of 2009, and is about to become the longest-serving CEO in the history of the company. When we spoke by phone several weeks ago, it was obvious why.

Lip-Bu Tan is gracious, calm, articulate, and optimistic – and he takes the long view. The right man at the right time, he clearly had what it took to successfully lead his company from the Worst of Times in 2008 to the Best of Times today.


WWJD: We have never formally met, except when I interviewed Prof. Chenming Hu at DAC in Austin in 2013 when he received the Kaufman Award. I know he is a friend of yours.

Lip-Bu Tan: Yes, Chenming is a very good friend.

WWJD: Cadence is currently putting up stupendous numbers. Over 7000 employees now, and the stock up 70-percent since the first of the year. Are these the Best of Times for the company?

Lip-Bu Tan: I have no complaints, but you have to look at the long-term. You have to look over 20 years to see if it’s a good company.

We have grown 18x in the 9 years [since I took over at CEO], which has increased shareholder value. So from the perspective of 15-to-20 years – yes, we are on track to be a successful company.

WWJD: How would you characterize current, leading-edge initiatives at Cadence?

Lip-Bu Tan: We are pursuing system-design enablement, SDE, with quite a laser focus. And we are pursuing IP, which is a part of SDE as a building block.

Several good proof points [of our success] include automotive, the data center, machine learning, IoT, and memory.

Also [our commitment] to system design and modifications includes high-speed PCB and package analysis, particularly with the Sigrity tools. And on the IP front, we have acquired high-speed SerDes, which are most critical for the data center.

These are all important initiatives for us.

We are very proud of our culture of innovation at Cadence. Over the last 3 years, we have introduced 25 new products – not through acquisition, but through our engine of innovation. These have all come through a culture of innovation, a culture of learning and execution as a team. It is a process that has really worked well to drive our success.

WWJD: How do you see the company’s road map? More EDA, more IP, more enterprise engagement?

Lip-Bu Tan: We don’t usually disclose our road map, but you can tie it into the whole system-design enablement initiative.

First of all, the foundation tools have to be strong and must be massively parallel. And now we are also applying machine learning to that.

Second, is to build from EDA tools to hardware/software co-design and co-verification, with a mixed-signal focus. Automotive, the data center, machine learning, lower-power IoT, edge computing, autonomous driving systems – we are pursuing all of these.

And IP across the board, with star IP as our focus. Tensilica has star IP, for instance, low power which is important. Moving up into the system, at the heart of the data center is high-speed SerDes connectivity, and we continue to look for star IP [for that application] as well.

At the end of the day, the tools and IP we develop are to support our customers, and all with excellent run time and fast verification on the digital side. We also offer verification on the analog side – everything from functional verification and simulation, all the way to hardware emulation and prototyping.

In a way, we are really providing a total solution. And not just to the silicon guy, but all the way up to the system-level tools, IP, and the packaging design tools that they need. We provide it all.

WWJD: In April, at the ESD Alliance CEO panel you commented on cyber-security and noted that Cadence is working on it. In what way?

Lip-Bu Tan: First of all, we are embracing the Cloud. Our R&D is pretty much in the Cloud, and product-by-product we are moving into the Cloud.

But when you move into the Cloud – the moment you have more devices and make it more mobile to check the status of simulations – you create vulnerabilities, so you really need to address security. But no matter how much your try, you will still have some vulnerabilities.

This is really a big job for our office and, knock on wood, we have not had any problems. We have protected ourselves very well and have extended that to our customers.

Still, these are things we take one step at a time, and we see them all as part of our readiness to protect our customers.

WWJD: How are you being impacted by evolution in Moore’s Law? Is it slowing, or even dead?

Lip-Bu Tan: Clearly, Moore’s Law is not dead, but it’s definitely slowing down.

Remember, the definition of Moore’s Law was to double the transistor count every 18 months. So yes, it is slowing because transistors are not now doubling every 18 months. However, other parameters include power, area, timing, and cost – and these do keep changing.

So it all depends on how narrowly you define Moore’s Law. If you define it rigidly, it’s at the end. But if you look at any one of these parameters, it is still going. It’s just going a little more slowly.

Also, as applications become more multicore and include parallelism, it becomes important to optimize to specific applications. For instance, depending on which application you want to optimize to, you might be looking at power the most, or perhaps performance.

You also may want to look at things from a systems point of view, 2.5 or 3D packaging, for instance – much of which plays to our strength at Cadence, because of our strong mixed-signal and packaging capability.

As I said early, we really have it all in one place.

WWJD: How does Cadence help companies adjust to new materials, and the enormous uptick in use of IP?

Lip-Bu Tan: We keep track of some of the new materials, not just CMOS and Silicon Germanium, but other new materials as well.

We are always working with different customers and trying new things to drive system behavior, and [to better understand] the impact on cell modeling. EDA tools are critical to enabling much of this new technology.

Also, we are helping drive a lot of IP success for our customers with our Tensilica [technology], and our verification IP which supports the new materials.

WWJD: How does a global industry like semiconductors deal with the issues of national boundaries?

Lip-Bu Tan: That is a very complex question.

Clearly, we believe in global market supply and demand. Last year and this year, for instance, the growth in international markets has been driven by DRAM and Flash, which are both taking off. This puts memory companies such as Hynix in a fantastic position – addressing a lot of new applications like IoT, machine learning, and edge computing.

We also acknowledge the China market, which is growing at an annual rate of over 20-percent. Someday the current trade deficits will change, however, and China will have to develop their own internal supply [of technologies].

But clearly, the ideal situation is a free world where everyone can optimize their business opportunities. Today, for instance, if a certain company is facing trade restrictions, they start to have challenges in competing in the market. This can really hurt the whole company, and its performance.

I am really a big proponent of free trade, and immigration must also be [open]. Although in my experience, good engineers always find a way to [great employment].

And so far as a company, Cadence has managed well in this area. We have managed our relationships with the international foundries, and with immigration issues very well.

WWJD: From the point of view of an active investor, as you are, is it better to invest in IP or in EDA? Perhaps embedded software? Other?

Lip-Bu Tan: Being a VC, I see that it is hard to invest in EDA, because at a certain point you really have to offer a complete solution to the customers. So I don’t see a lot of EDA startups today.

In the IP industry, there are some startups, although it’s a very competitive space.

To start an IP company is difficult to do, because there are a lot of challenges and only a few people are able to do it. So again, I think there are not a lot of IP startups.

[In both EDA and IP], there are not too many people interested in investing. Today social media and Software as a Service are the investments that make for [interesting opportunities].

WWJD: Several years ago at a Press Event hosted by Cadence, you said that your sons had recommended that you invest in Tesla and Netflix, but you had not taken their advice. What are they recommending these days?

Lip-Bu Tan: [laughing] They have their own circle of friends who they learn from and [do not always share with me]. Perhaps I need to pay more attention.

WWJD: How does Cadence find new talent to hire?

Lip-Bu Tan: We have an active university program, so 20-percent of our hires are from those colleges.

WWJD: Also at the ESD Alliance CEO forum in April, you said that professors are telling their students to go into software or social media. How do we get professors to encourage their students to go into hardware design?

Lip-Bu Tan: We believe if you don’t have innovation, a company has to shut down because you will run out of ideas, so we always want to be in front of professors – the famous professors – to educate them about the fact that a lot of innovation is needed in semiconductors.

There are lots of new areas – for instance, to improve battery life by designing devices to wake up and go to sleep to save power. There is a lot of innovation needed here, and in other areas as well.

I’m very excited about the opportunities for young engineers in semiconductors and EDA.

WWJD: Why belong to the ESD Alliance?

Lip-Bu Tan: There are a couple of points here.

One, it offers a kind of industry representation to [tackle] some of the challenges unique to EDA and IP, ranging from piracy to security. As design complexity increases, so does piracy. I think the ESD Alliance clearly helps to address that.

The ESD Alliance also helps sponsors events like DAC, which provides a platform for engineers and students. This is relevant to everyone and helps the industry grow.

Two, it provides a voice for the industry, and politically a way to address things [similar to] the GSA and SIA. As with those organizations, the ESD Alliance helps to educate the government about how much impact we create and help the industry grow.

WWJD: Do you have any amusing anecdotes from your long career in technology?

Lip-Bu Tan: [laughing] That would be hard to say.

Qi Wang: [VP and Chief of Staff, also on the call] Actually, when Lip-Bu took the job 9 years ago, Cadence was in bad shape and he was asked to give some money back to a customer.

Lip-Bu Tan: [chuckling] Yes, that is true. At the time, 9 years ago, it was very stressful at Cadence. What a journey it has been, to come this far from then to now.

Looking back, it has been a good journey, and in that process we have created value for the shareholders. There are a lot of customers who are very happy with the help we give to them for their designs.

At the end of the day, it’s about providing a service to the industry. And that is why I felt called to come into Cadence and do this work.

WWJD: Do you travel a lot?

Lip-Bu Tan: [laughing] Actually, I just flew back from China. On the flight, the airline said to me: ‘Lip-Bu, thank you for being a customer. You have now flown 3 million miles with us.’

And that is just one airline! Happily, I don’t get jet lag and I still enjoy my work.

WWJD: What is your favorite airline?

Lip-Bu Tan: [laughing] Singapore Airlines!


Bio …

Lip-Bu Tan has served as 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.

Previously, he served as Co-Chairman of the Board of Directors of the ESD Alliance, and currently serves on the board of GSA, as well as the boards of Hewlett Packard Enterprise Co., Quantenna Communications, and Semiconductor Manufacturing International Corp. He also serves on the Board of Trustees and the School of Engineering Dean’s Council at Carnegie Mellon University. Tan is the recipient of the 2016 GSA Morris Chang Exemplary Leadership Award.

Tan received an MS in Nuclear Engineering from MIT, an MBA from the University of San Francisco, and a BS from Nanyang University in Singapore.


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