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Cadence CEO's EDA ambition

Posted: 24 Jun 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Mentor buyout? Cadence Design? EDA?

If Cadence Design Systems Inc. president and CEO Michael Fister had enough cash, he might be making a daring bid for Intel Corp., his employer of 17 years and the world's biggest semiconductor company by revenue.

But with only $1 billion or so in his kitty rather than the $200 billion or more that Intel might command, Fister is gunning instead for EDA rival Mentor Graphics Corp.

But those close to the 53-year-old executive believe it's only a matter of time before he makes an even bigger splash.

Jim Fister is among them. In an interview, he described his big brother Mike whose last position before joining Cadence was senior VP and general manager of Intel's enterprise platform group as a "very, very driven guy."

It's a trait shared by many in the Fister clan, including Mike's eldest daughter, who runs a PR agency in Los Angeles.

"We all trace it back to our dad, a GE jet engine test engineer who was the hardest-working guy we ever knew," said Jim Fister, himself a server executive at Intel.

Quality also makes an impression on the Cadence chief. "He waxed eloquent, soon after he joined Cadence, about a meeting in the DaVinci conference room at IBM that had a real DaVinci hung on the wall," his brother recalled. "I [jokingly] asked him if it was 'as nice as the conference rooms at Cadence,' and he said by the time he was done, it would be."

The Cadence chief isn't bashful about his goals, but neither does his engineering mindset encourage rash actions.

Cooking the deal
Indeed, although some critics have characterized the Mentor bid as an arrogant grab meant to forestall problems at Cadence, Fister began preparing for a deal of this scale almost as soon as he joined the EDA market leader in May 2004.

By the end of 2007, he had grown Cadence's cash and short-term investments to more than $1 billion ammunition to pursue acquisitions without bending over backward to please lenders.

And it shouldn't have been a surprise that Cadence made a play for Mentor instead of its smaller rival Magma Design Automation Inc., which on June 18 had a market value of approximately $300 million.

In an interview with EE Times last December, Fister telegraphed Cadence's strategy to both its EDA rivals and its customers. Cadence, he said, would push for market dominance through acquisitions and an expanded product offering, adding that customers could expect to pay a premium for the improved service.

"We are not just doing this to be the biggest EDA company in the world," he said. "We want to help customers evolve to where they want to go, and the value has to be appreciated."

Fister's public persona is low-key and self-effacing, but no one gets to the upper echelons of Intel management without the toughness to deliver results and weather corporate battles.

His move to Cadence after nearly two decades at Intel suggests Fister wanted a CEO post and was unwilling be one of many in contention to succeed Paul Otellini. The question is whether the longtime server exec has done enough homework to deal with the EDA sector's historic challenges.

Of course, a seasoned executive like Fister could find a home at another chip company or even outside the industry. He could close the Cadence-Mentor Graphics deal, hand the merged company to a successor and seek fresh opportunities elsewhere.

Ambition asks no less of those who set no limits for themselves.

- Bolaji Ojo
EE Times

Additional reporting by Rick Merritt

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