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Cadence Design Systems Inc. Message Board

  • thownout thownout Nov 25, 2009 1:14 PM Flag

    CDNS could be a bankrupt company

    look at that debt and lack of cash flows. Going under sooner or later.

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    • EDA is not a high growth market and hasn't been for some time. As your link points out, the EDAC numbers showed a decline over the last year, but I'd think that's a reflection of the economy. It's not a saturated market - most of EDA business is term based which means it renews, typically after a 3 year term. Of course, CDNS was caught out playing some games by mortgaging the future - hence their current predicament. Another aspect of saturation is that EDA will also be tied to the growth of electronics (not only semiconductor). So there is some growth potential.

      I do not agree that EDA revenues have been flat or declining for several years, at least not according to EDAC. There was a decline in 2008 & 2009. Of course, the 2008 decline was largely affected by the Cadence fiasco. I believe with 2009, we are back to a realistic view of revenues in EDA so I'd expect growth in 2010 (barring the economy tanking).

      Given design starts for ASICs/SOCs are declining, look for growth in ESL system level design, hw/sw. PCB will remain reliable, as will verification & custom IC.

      An industry segment does not have to be a big growth segment in order for companies to prosper. So long as it is profitable, what's wrong with value? Hence my belief that CDNS can go to 12 in a year or so. I'm not a CDNS bull or bear. I can see some upside potential but I have my doubts about the unproven leadership over there.

      BTW, I hear CDNS is laying off some folks this week - mostly in sales.

    • Dear edabarsteward,

      Is this forum only for investors, competitors, analysts or ex-employees (or whatever) only? Please do not display your narrow mindedness by being personal in your comments. You are free to assume whatever you wish to - I am just expressing my opinion, which I am sure you would agree that everyone on the net is free to do so.

      Thanks much for sharing your knowledge of EDA products - but ignore the flat line revenue growth at your own peril. I assume you would also agree that EDA is a saturated market and is on its way down in terms of revenues. EDA revenues for past several years have been flat or declining. Agreed, there are a few good companies who keep fighting among themselves to grab their share of pie. Some are winners, some are losers, but overall there is little growth which can be foreseen in this segment. Companies can keep cutting the costs to the bone and be profitable, but unfortunately new areas of growth are limited for EDA segment (I don't see any).

    • Most of the message boards on Yahoo are crowded with morons who know nothing about stocks or politics. Cadence is the Auto-Desk of the Chip design industry. There is not a chip designer whether working in industry or academia who does not use Cadence tools. The possibility of this company going bankrupt is zero. The possibility of CDNS going to $30 in a couple of years when the economy picks up is high. I suggest you add instead of spreading your useless dribble.

    • This is true but CDNS has a huge staff working on products that don't generate much revenue. They could cut hundreds and hundreds of people and not see a great impact to the top line but this act would save millions. If they don't do this then you're right, they will run out of cash sooner rather than later.

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