Chip Designers Cadence And Synopsys Remain Strong Amid Semiconductor Shortage

In 2021, the COVID pandemic brought global supply chains to a screeching halt, and the semiconductor industry suffered more than many others. But thanks to companies such as Cadence Design Systems and Synopsys, providers of electronic design automation (EDA) software, chip design hasn’t skipped a beat. Both companies boast nearly four decades in the tech landscape, which contributes to their overall dominance of the EDA market—as well as their consistent and steady revenue growth.

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Both chip design and custom chip adoption are driving factors in the continued growth of the EDA industry, fueled by major tech players including Amazon, Alphabet, Intel, Cisco, and many more. One analyst from J.P. Morgan foresees a 10-15% revenue compound annual growth rate (CAGR) for Synopsys and Cadence—a range both companies reported in 2021, contrasting with the S&P 500 index declining by more than 11% in the same period. Both companies also recently raised their guidance numbers to reflect their strong performances, and with the increasingly ubiquitous need for semiconductors and microchips, they can expect to see continued growth despite economic struggles.