Cadence Design Systems CEO: 45% of our business now is companies designing chips

August 19, 2026 - 02:26

Cadence Design Systems President and CEO Anirudh Devgan appeared on Mad Money with Jim Cramer to discuss the shifting landscape of the semiconductor industry. Devgan noted that a major milestone has been reached: 45 percent of the company's business now comes from companies that are designing their own chips. That is a significant jump from just a few years ago, when most of the work was concentrated among a handful of large chipmakers.

Devgan explained that the surge is driven by a wave of new players entering the market. Cloud giants, automotive firms, and even industrial equipment makers are now building custom silicon to differentiate their products. He pointed to the rise of physical AI, which combines machine learning with real-world robotics and autonomous systems, as a key area where custom chips are becoming essential. These applications demand specialized processors that off-the-shelf parts cannot deliver efficiently.

The conversation also touched on Cadence's ongoing partnership with Intel. Devgan described the collaboration as deep and strategic, covering everything from advanced process nodes to design tools that help Intel push the limits of chip density. He stressed that while the industry is cyclical, the long-term trend toward more specialized silicon is not slowing down. For Cadence, that means a broader customer base and a more resilient revenue stream than in the past. Devgan remained upbeat about the next few years, saying the design backlog is strong and that the company is well positioned to help both traditional chipmakers and newcomers navigate the growing complexity of modern electronics.