Cadence Names New CEO

Putting all speculation to rest, on Thursday, Cadence (CDNS) named Lip-Bu Tan as its new CEO. Tan has been on the board of Cadence for five years. Here are further details from EE Times and DeepChip.

With this appointment, Cadence selects a first-time CEO, albeit a very smart guy with a real track record in the venture business.

Good news: Tan understands venture capital and innovation and will most likely reactivate the M&A activity necessary to keep the product line moving. Mike Fister managed to choke this process with his Intel-bred NIH (Not Invented Here) syndrome. Tan may also reactivate Cadence’s own venture capital firm, also necessary to unclog the financing bottleneck in the EDA startup business. No mainstream VC funds EDA anymore, leaving entrepreneurs with few or no options.

Bad news: It's a bit of a rolling of the roulette wheel for Cadence with a first-time CEO, despite his ringside view from various boards.

I am also somewhat curious as to why a man of Tan’s profile, and at the stage of life he is in, would want to do this job now.

I will ask him the question if and when I get the chance.

Disclosure: None

Comments

[PitchMonk:]

Sramana,
I think your good news is not really good news. In EDA, I think the startup companies are suffering from lack of buyers (or customers) more than lack of VCs. The sales channels are dominated by the big 3 (or 4) and are heavily controlled by deep discounts. Unless this unhealthy practice stops, no VC, let alone Cadence as a VC, will enter the picture. Sure, Cadence can act as VC for its own acquisition, but it is not good for the industry.

My 2c

Jan 09 01:51 PM

[Sramana:]

I think, Cadence (and Synopsys) acting as both VCs and acquirers is the ONLY way forward right now for the EDA business. Cadence has done this before for many years with Telos. It allowed them to keep the innovation investment outside their P&L, a useful trick in Wall Street's daft game of quarterly earnings and short term point of view.

Jan 09 08:58 PM