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Cadence & TSMC Team Up to Boost AI-Driven Advanced-Node Designs
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Cadence Design Systems, Inc. (CDNS - Free Report) has collaborated with TSMC to enhance efficiency and performance in AI-driven advanced-node designs and 3D-ICs. This partnership is aimed at addressing the rising demand for advanced silicon solutions capable of processing large datasets and complex calculations. TSMC has approved Cadence’s leading digital and custom design flows for use with its latest N3 and N2P process technologies.
The Cadence Integrity 3D-IC Platform is used for system-level exploration, integrating packaging and analog and digital implementation for effective 3D-IC design. It supports the latest 3Dblox features and fosters innovation. TSMC and Cadence are developing a high-capacity substrate router for die-to-die and die-to-substrate connections in TSMC 3DFabric technologies.
Moreover, the AI factories' relentless demand for data is raising interconnect requirements and pushing power limits. Cadence offers a wide range of essential IP for efficient data transfer between chiplets and data centers, including Universal Chiplet Interconnect Express (UCIe) 1.0, PCI Express (PCIe) 6.0 and the first silicon-proven GDDR7 on TSMC N3, which runs at 32Gbps, delivering optimal price/performance for artificial intelligence (AI) interfaces in data centers and network edges.
To tackle the increasing communication challenges among these chips, Cadence's silicon photonics solutions enhance TSMC’s Compact Universal Photonic Engine. Their collaboration extends to key players in the automotive sector, where the increasing silicon demands underscore the importance of IP development for current and future nodes, including TSMC N5A and N3A.
TSMC and Cadence are also working on advancing Cadence.AI. This collaboration centers on three areas: Cadence’s Cerebrus Intelligent Chip Explorer uses AI to optimize PPA, the JedAI Platform employs generative AI for design debugging and analytics and Cadence’s Virtuoso Studio aids in migrating legacy designs to modern nodes while performing circuit optimization and Monte Carlo analysis.
Cadence Focuses on Strategic Collaborations
Cadence is likely to benefit from customers increasing their R&D spending in AI-driven automation. It remains focused on embedding cutting-edge AI capabilities across its System Design Automation (SDA), Electronic Design Automation (EDA) and digital biology offerings. Additionally, expanding collaborations provides further momentum for growth.
On June 12, 2024, Cadence announced a collaboration with Samsung Foundry to accelerate the development of systems and semiconductors that support the industry’s most demanding applications, such as AI, automotive, aerospace, hyperscale computing and mobile.
On April 24, 2024, it announced an extension of its partnership with TSMC to advance system and semiconductor design for AI, automotive, aerospace, hyperscale and mobile applications.
In the second quarter of 2024, the System Design & Analysis business benefited from AI-driven design optimization platforms and higher demand for its 3D-IC platform, with revenues from this segment increasing 20% year over year. The IP business also benefited from increasing AI use cases, especially HPC and heterogeneous integration, with revenues from the segment up 25% year over year.
Management has upgraded the revenue guidance for 2024 owing to the BETA CAE acquisition. Revenues for 2024 are now projected to be in the range of $4.6-$4.66 billion compared with the previous guidance of $4.56-$4.62 billion. However, intensifying competition and high levels of goodwill and intangible assets remain concerns.
CDNS’ Zacks Rank & Stock Price Performance
CDNS currently carries a Zacks Rank #4 (Sell). Shares of the company have gained 17.9% in the past year compared with the sub-industry's growth of 36.4%.
Seagate Technology delivered an earnings surprise of 80.9%, on average, in three of the trailing four quarters. In the last reported quarter, STX pulled off an earnings surprise of 40%. The Zacks Consensus Estimate for STX has increased 18% to $7.41 in the past 60 days.
ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.
American Software delivered an earnings surprise of 84.5%, on average, in the trailing four quarters. In the last reported quarter, AMSWA pulled off an earnings surprise of 71.4%. The Zacks Consensus Estimate for AMSWA has increased 8.6% to 38 cents in the past 60 days.
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Cadence & TSMC Team Up to Boost AI-Driven Advanced-Node Designs
Cadence Design Systems, Inc. (CDNS - Free Report) has collaborated with TSMC to enhance efficiency and performance in AI-driven advanced-node designs and 3D-ICs. This partnership is aimed at addressing the rising demand for advanced silicon solutions capable of processing large datasets and complex calculations. TSMC has approved Cadence’s leading digital and custom design flows for use with its latest N3 and N2P process technologies.
The Cadence Integrity 3D-IC Platform is used for system-level exploration, integrating packaging and analog and digital implementation for effective 3D-IC design. It supports the latest 3Dblox features and fosters innovation. TSMC and Cadence are developing a high-capacity substrate router for die-to-die and die-to-substrate connections in TSMC 3DFabric technologies.
Moreover, the AI factories' relentless demand for data is raising interconnect requirements and pushing power limits. Cadence offers a wide range of essential IP for efficient data transfer between chiplets and data centers, including Universal Chiplet Interconnect Express (UCIe) 1.0, PCI Express (PCIe) 6.0 and the first silicon-proven GDDR7 on TSMC N3, which runs at 32Gbps, delivering optimal price/performance for artificial intelligence (AI) interfaces in data centers and network edges.
To tackle the increasing communication challenges among these chips, Cadence's silicon photonics solutions enhance TSMC’s Compact Universal Photonic Engine. Their collaboration extends to key players in the automotive sector, where the increasing silicon demands underscore the importance of IP development for current and future nodes, including TSMC N5A and N3A.
TSMC and Cadence are also working on advancing Cadence.AI. This collaboration centers on three areas: Cadence’s Cerebrus Intelligent Chip Explorer uses AI to optimize PPA, the JedAI Platform employs generative AI for design debugging and analytics and Cadence’s Virtuoso Studio aids in migrating legacy designs to modern nodes while performing circuit optimization and Monte Carlo analysis.
Cadence Focuses on Strategic Collaborations
Cadence is likely to benefit from customers increasing their R&D spending in AI-driven automation. It remains focused on embedding cutting-edge AI capabilities across its System Design Automation (SDA), Electronic Design Automation (EDA) and digital biology offerings. Additionally, expanding collaborations provides further momentum for growth.
On June 12, 2024, Cadence announced a collaboration with Samsung Foundry to accelerate the development of systems and semiconductors that support the industry’s most demanding applications, such as AI, automotive, aerospace, hyperscale computing and mobile.
On April 24, 2024, it announced an extension of its partnership with TSMC to advance system and semiconductor design for AI, automotive, aerospace, hyperscale and mobile applications.
Cadence Design Systems, Inc. Price and Consensus
Cadence Design Systems, Inc. price-consensus-chart | Cadence Design Systems, Inc. Quote
In the second quarter of 2024, the System Design & Analysis business benefited from AI-driven design optimization platforms and higher demand for its 3D-IC platform, with revenues from this segment increasing 20% year over year. The IP business also benefited from increasing AI use cases, especially HPC and heterogeneous integration, with revenues from the segment up 25% year over year.
Management has upgraded the revenue guidance for 2024 owing to the BETA CAE acquisition. Revenues for 2024 are now projected to be in the range of $4.6-$4.66 billion compared with the previous guidance of $4.56-$4.62 billion. However, intensifying competition and high levels of goodwill and intangible assets remain concerns.
CDNS’ Zacks Rank & Stock Price Performance
CDNS currently carries a Zacks Rank #4 (Sell). Shares of the company have gained 17.9% in the past year compared with the sub-industry's growth of 36.4%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader technology space are Seagate Technology Holdings plc (STX - Free Report) , ANSYS, Inc. (ANSS - Free Report) and American Software, Inc. (AMSWA - Free Report) . STX presently sports a Zacks Rank #1 (Strong Buy), whereas ANSS & AMSWA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Seagate Technology delivered an earnings surprise of 80.9%, on average, in three of the trailing four quarters. In the last reported quarter, STX pulled off an earnings surprise of 40%. The Zacks Consensus Estimate for STX has increased 18% to $7.41 in the past 60 days.
ANSYS delivered an earnings surprise of 4.8%, on average, in three of the trailing four quarters. In the last reported quarter, ANSS pulled off an earnings surprise of 28.9%. It has a long-term earnings growth expectation of 6.4%.
American Software delivered an earnings surprise of 84.5%, on average, in the trailing four quarters. In the last reported quarter, AMSWA pulled off an earnings surprise of 71.4%. The Zacks Consensus Estimate for AMSWA has increased 8.6% to 38 cents in the past 60 days.