Cadence Design Systems makes the specialized software that chip designers use to design, simulate and verify semiconductors before they're manufactured, a category known as electronic design automation. Its software is deeply embedded in how chipmakers work, since switching design tools mid-project is expensive and risky, giving Cadence and its main rival Synopsys a duopoly-like position in this niche but essential software market. As chips have grown more complex, with more transistors packed into smaller spaces, the design and verification software needed to catch errors before expensive manufacturing begins has become correspondingly more valuable. Cadence sells mostly through multi-year licensing agreements, giving it a fairly predictable, subscription-like revenue base tied to the health of the broader semiconductor design industry.