Macroeconomic factors drive growth
Cadence Design Systems’ (CDNS) Custom IC Design product division has reported strong revenue growth fueled by rising smartphone and other electronic equipment demand throughout the world.
According to research company Gartner, worldwide electronic device shipments in 2018 are expected to expand by 2.1% to 2.3 billion units compared to 2017. The company expects that such growth will be fueled by the high-end smartphone market coupled with thin and light Apple and Microsoft Windows 10 (MSFT) devices.
In the graph above, we can see the revenue trend from the Custom IC Design product category over the last five quarters. During the period, its revenue fell at a CAGR (compound annual growth rate) of 2.7%.
4Q17 and 2017 performance analysis
In 4Q17, the Custom IC Design product category improved 11.3% YoY (year-over-year) buoyed by growing popularity in new markets.
Stiff competition in the chipset market has led to more complexity in terms of design. Hence, the implementation of Cadence’s custom-made design and simulation facility could boost demand in its Custom IC Design product category. Two of the top three memory manufacturer companies have now accepted the company’s Spectre XPS fast-SPICE simulator and characterization solutions.
In 2017, the revenue for this product division came in at nearly $515 million, a rise of 10.1% compared to the previous year’s period. Cadence Design Systems has a strong client base, which includes big chipset makers such as MediaTek, NVIDIA (NVDA), Texas Instruments (TXN), and Qualcomm (QCOM). These partnerships may help the company boost its revenue by product category.