Anirudh Devgan, the Global President and CEO of Cadence Design Systems, which has a market cap of nearly $41 billion, says its India operations have played a key role in its recent growth spurt. Edited excerpts of the interview:

Q

What has been driving the growth for Cadence, have the shifts happening to 5G, IoT, and autonomous vehicles, been the tailwinds?

We are in a great position overall as we always drive both, revenue growth and profit margin. We had a 17 per cent revenue growth and 40 per cent operating profit. Cadence invests a lot in R&D, even with a 40 per cent margin, almost 35-40 per cent investment in R&D. 

There are multiple reasons for growth and we have three big thematic growth drivers. First, semiconductors are in a massive growth cycle for reasons like 5G, AI, and data centres. We are tied to R&D with our customers for revenue, if they do well, then we will have success. The second big growth vector is about 45 per cent of our business comes from our system companies, this is the big change in the last 2-3 years. In the system companies, we have phone companies and data centres, which are huge in the US and Asia. Then, the car companies, we have a partnership with Tesla and that’s a very big growth driver for us.

Thirdly, we have re-positioned our company, from just EDA - chip design to SDA - System Design and Analysis as well. We have a huge investment in R&D and that business is also growing, Cadence is growing 17% this year and that business will grow to 25%. We also have a partnership with McLaren to simulate their cars. 

Q

What is the exposure you have to India, given the growth patterns being witnessed in the markets? What kind of work gets done out of India ops? 

Out of over 9,500 employees, about 3,000 are in India. It has the biggest strength in engineering talent. Indian employees are designing products for Qualcomm, Intel etc.  Our IP group and a customer-facing R&D centre are in Bengaluru. In Noida, we have several product areas run by Indian leaders. However, the revenue contribution directly from local companies is low. 

Q

What is your roadmap for India? 

Cadence has 900 positions open globally, about 450 of those positions will be in India. We continue to grow and expand our presence in Bengaluru, Noida, Pune, and Ahmedabad. We have inaugurated a new building in Noida, with a capacity of 600 people and a new facility in Ahmedabad will be set up soon. A large part of our R&D activity will continue to grow in India.

Q

Do you see opportunities in government engagements like Atmanirbhar Bharat? 

Yeah absolutely. I think we will be a great enabler for the Indian Government. Just like we work with US Government or even China, and we are a global company. India is a special interest because of how many people we have and it has the biggest strength in talent pool. 

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