Cadence Design Systems, Inc. CDNS recently announced that its flagship enterprise emulation verification platform — Palladium Z1 — has been deployed by Acacia Communications, Inc. to design advanced DSP (or digital signal processor) ASICs.
Cadence Palladium Z1 is loaded with high verification throughput capabilities and robust debug features. Further, the solution is capable of handling high capacity workloads, which provides it an edge in designing hardware for optical networking applications.
To quote, director of ASIC at Acacia Communications, Jon Stahl, “In order to build a high-performance, low-power optical module, we needed a solution that could accommodate designs of up to 650M gates.”
Moreover, Palladium Cloud and Cadence’s cloud-based model aided Acacia to manage and upscale verification of around thousands of frames, which accelerated ASIC development process considerably.
The increasing adoption of Cadence’s offerings is expected to strengthen the company’s presence in the Electronic Design Automation (EDA) market.
Moreover, an expanding customer base is instilling confidence in the Zacks Rank #2 (Buy) stock. Notably, shares of Cadence have returned 64.3% on a year-to-date basis, significantly outperforming the industry’s rally of 32%.
Solid Functional Verification Portfolio Favors Adoption
Cadence continues to invest heavily in verification and digital design products, which is helping it to launch products that address the ever-growing needs of electronics and semiconductor companies.
Notably, the company’s Functional verification products comprise four primary verification engines — JasperGold formal verification platform, Xcelium parallel simulation platform, Palladium Z1 enterprise emulation platform and Protium S1 FPGA-based prototyping platform.
Moreover, Cadence Verification Suite, comprising Palladium Z1 Platform, supports the company’s Intelligent System Design strategy, which enhances SoC design expertise.
Particularly, increasing popularity of the company’s innovative cloud-ready solutions and strong demand for growing hardware capacity is fueling adoption of Palladium Z1.
Cadence recently announced that Innovium has implemented the Palladium Z1 platform and the Protium S1 to accelerate development of its Ethernet switch. Furthermore, in the last reported quarter, Palladium Z1 witnessed two new customer wins which included SambaNova Systems. The platform garnered 13 repeat orders, including Annapurna Labs, which has been acquired by Amazon AMZN.
Further, NVIDIA recently selected the company’s Protium X1 platform to speed up development of its high-capacity GPUs.
The growing clout of AI, 5G and ADAS chipset making is fueling demand for computational software tools, which favors Cadence’s prospects. Per ResearchAndMarkets data, the EDA tools market is anticipated to hit $17.35 billion by 2024, compared with $9.76 billion in 2018, at a CAGR of 10.1%.
Additionally, Cadence is evolving its silicon-based design strategy with an aim to meet complex computing demands of emerging ADAS, 5G and AI applications. In fact, the company has created a new System Analysis Group to focus exclusively on system analysis and design. We believe that the latest customer wins will bolster the company’s financial performance.
Other Key Picks
A couple of other top-ranked stocks worth considering in the broader sector are Rosetta Stone Inc. RST and j2 Global, Inc. JCOM, both sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Rosetta Stone and j2 Global is pegged at 12.5% and 8%, respectively.
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