San Jose, Calif. ― In the spring of 1999, Cadence Design Systems Inc. was in turmoil. The design automation leader was still smarting from its long, emotional court battle with Avanti over code theft. Its stock was sliding, and its CEO, Jack Harding, had fallen from favor. The board tapped CFO Ray Bingham to replace Harding, betting Bingham's solid number-crunching skills would calm Wall Street fears and get the train back on track. "While Cadence has been very successful in many ways, from a broader corporate perspective we have some things to work on," Bingham said the day he was promoted. He could say the same today. Four years later, Cadence has lost its No. 1 market share position to rival Synopsys Inc., which was once a third of Cadence's size in revenue. Its stock price is the same as it was at this time last year, while the share prices of Synopsys and Mentor Graphics Corp. have grown 50 percent and 150 percent, respectively, over the same period. Cadence is still believed to be six to 12 months away from completing a seamless IC tool flow to compete head-on with that of Synopsys. And recent acquisitions, which have led to layoffs and brought in management that has shifted the corporate culture, have depressed morale at the San Jose company.
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