While I was in Germany recently, I sat down with the head of Cadence EMEA (Europe, Middle-East, and Africa), Sanjay Lall. Back when we were both a lot younger, we both worked at VLSI Technology. I was a software development engineer, he was an application engineer before moving into marketing. We both toured the solar system of EDA like lost planets before coming back together at Cadence a couple of years ago. Sanjay told me that the key turning point in his career was working at Epic design working for Sang Wang. Epic had a family of superfast high capacity transistor simulators called TimeMill, Pathmill, and Powermill. He joined in August 1990, only to be told in December that they were running out of cash and had a real short runway left to operate. But they brought in Bernie Aronson as the new President, who raised money, and then they went public in 1995. Eventually, they were acquired by Synopsys in 1997. Bernie asked Sanjay to move to Texas from San Jose, so he went, initially just working out of his apartment before he set up the regional sales and support office in Austin, Texas. After Synopsys acquired EPIC, he parted ways, and started his own rep firm covering the Texas market. He had an investment model where he would only rep companies if he was allowed to invest and or receive stock. This avoids the rep’s dilemma that if you don’t sell anything you get fired, and if you are wildly successful, the company gets acquired and the new owner promptly terminates the rep agreement. The rep agreement still gets canceled, but at least you make money on the acquisition. During the course of his company, he was in discussions with one of his suppliers, ExtremeDA, in 2005 when the CEO, Mustafa Celik and Board Member, Lucio Lanza asked him to join the company instead of just representing them. They were competing against PrimeTime. A few years later ExtremeDA got sued and then acquired for a token amount. So he was out of a job and became a consultant for AtopTech, Ausdia, and a few other companies. Charlie Huang, who was running sales at the time (and emulation engineering, not quite as weird a combination as Mark Gogoloski who was Denali’s CTO and CFO), called him in 2013. Cadence had just launched Tempus to…you’ve guessed it…compete with PrimeTime. There was a bit of turmoil and when the dust settled, Neil Zaman was running sales (WFO in Cadence-speak) and asked Sanjay to run emulation. Cadence had just launched Palladium Z1 (see my post Palladium Z1, an Enterprise Server Farm in a Rack ) so, as Sanjay put it, “the rest is history.” As you could tell from listening to earnings calls over the last couple of years, the product has been incredibly successful. We were even selling boxes with no evaluation, which is amazing given that emulators are…let’s just say not cheap. At the end of 2016, Neil asked Sanjay to take over Europe and “get growth.” So on April 1st 2017 he took over EMEA, and moved himself and his family to the UK. His timing was great once again, since Europe is strong in automotive, machine learning, AR/VR, 5G & IoT. The numbers for automotive semiconductors hide what is going on, since the growth is healthy but not exceptional. But on the design side, where Cadence makes its money, it is exploding. Those chips won’t be in production until model year 2022, 2023 (or even later) but they have to be designed now. Sanjay realigned the organization, especially around this automotive vertical which is strong in Europe and system design enablement to address the other growth markets. It is especially strong in Germany (have you heard of Bosch, BMW, Mercedes, Audi, VW, Porsche…). As Sanjay put it: Automotive is in my face 24/7 across the whole ecosystem…OEMs, Tier-1s…ADAS is going amazingly Translations from automotive-speak: OEMs are car companies like Ford or BMW. Tier-1s are their primary electronic suppliers like Bosch or Delphi. ADAS is “advanced driver assistance systems” which is another way of talking about the early phases of self-driving cars. Talking of BMW, I can’t resist, at this point, of showing you the picture to the right. It’s in the BMW Museum (BMW is headquartered in Munich—the B stands for the equivalent of Bavaria in German, where Munich is the capital). Yes, it really is a BMW, the 1955 Isetta. I showed the picture to a journalist at the press dinner and he immediately knew what it was since his uncle had owned one. It’s obviously rubbish by modern standards, but it would be pretty cool to drive a car like that around Silicon Valley with a BMW logo on the front. Well, it would be fun to arrive—the driving not so much. In automotive, there are lots of startups in Lidar, infotainment, sensors, cybersecurity and more. Some will fail and some will get acquired. But in the meantime they are all doing designs. The OEMs (car companies) are dabbling in potentially doing their own silicon since future differentiation will not be in ICE anymore (that’s “internal combustion engine” in automotive-speak). Israel is also on fire with lots of well-funded startups, coming out of the starting-blocks with $5-10M funding, and doing advanced node work. There are lots of new analog companies in the UK, and the Nordic area (this is code for Nokia and Ericsson) are chasing 5G for base-stations. Nokia has also re-entered the handset business after its non-compete with Microsoft expired (they bought its previous handset business). The big semiconductor companies in Europe are doing well. Even NXP has leveraged its reliability and security technology to major positions in banking and automotive. Just look at ST’s stock price over the last 3 years. Or the job openings at ST, Nokia, Ericsson, and more. So many engineers being hired. With local labor laws, companies are cautious about hiring, but they are truly investing for the long-haul. They are well-aligned with us. The challenge is to deliver everything they need. Sanjay said that they even have over half-a-dozen 7nm startups. It costs $10M just for a 7nm mask-set so you don’t even build a prototype without customers willing to buy in high volume. It takes $15-25+M to develop the SoC, tape out in 2019, get parts into 2022 model cars. I asked Sanjay how the future looks: I’m excited about the prospects for EMEA over the next 2-3 years. There is lots of innovation and energy in many of the verticals. Arm has created a lot of new angels who are silicon-literate. There’s a tremendous push and investment in the 5G race in Scandinavia. And automotive everywhere. Sign up for Sunday Brunch, the weekly Breakfast Bytes email.![]()
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