Cadence and Unisys announce $75 million hardware design outsourcing venture; sets new business model for electronic design automation.

SAN JOSE, Calif.--(BUSINESS WIRE)--March 6, 1995--Cadence Design Systems, Inc. (NYSE:CDN) and Unisys Corporation (Blue Bell, PA) today announced that they have agreed to have Cadence assume substantial portions of Unisys' internal silicon design operation.

The outsourcing contract is valued at approximately $75 million over 5 years. As a result of the agreement, more than 150 current Unisys hardware and software designers will become Cadence employees.

The outsourcing venture is unique in that it is by far the largest multi-year contract ever undertaken by Cadence or any other electronic design automation (EDA) company. In addition, it is the first time any EDA company has ever engaged in a major design outsourcing project.

"This represents a major milestone for Cadence and for the EDA industry as a whole," stated Joseph B. Costello, president and CEO of Cadence Design Systems. "The business of electronic design automation has fundamentally changed. It is no longer sufficient to simply be a supplier of `hot' software tools. Software continues to be important, but as an element in a greater picture. The underlying benefit of this new business model is that each of us can leverage our core competencies. Unisys will be able to focus on what they're best at -- services-led solutions -- by providing the best in systems design, software and service. Cadence will focus on managing what we know best -- providing product design expertise, methodologies and advanced software necessary to create leading-edge electronic product development environments (PDEs)."

"This partnership makes sense from a number of perspectives for Unisys," said Fred DeSantis, group vice president of the Platform Development Group at Unisys. "As we progress in our common platform strategy for all of our products, and as ASIC and microprocessor technologies and industry commodity parts continue their advances, our design focus will be on areas of differentiation and higher system level functions. By combining our current expertise in ASIC development and tools with the expertise at Cadence, we enhance and strengthen the capabilities available to Unisys not only today but also for the foreseeable future. In addition, Cadence is also strengthening their ability to service Unisys and others with the infusion of a team of ASIC design and service experts skilled in leading-edge ASIC development."

Costello added, "Although this is by far the most comprehensive outsourcing agreement we have ever embraced, Cadence has the advantage of being able to draw from a wealth of experience in this arena. We believe an effective outsourcing model in EDA calls for leading-edge CAD technology, extensive experience in methodology development and implementation, a breadth of library development experience, and a demonstrated ability to deliver contract designs that meet market windows in a business arrangement that shares risk and reward appropriately. And as evidenced by the magnitude of this partnership, Unisys has faith in our ability to provide them with what they need."

Typical of outsourcing agreements in other disciplines, the arrangement calls for Unisys to provide current and future Cadence employees access to Unisys' facilities in Rancho Bernardo, CA, Roseville, MN, and Tredyffin, PA, for the duration of the contract. In return, Cadence will provide the ASIC design and engineering expertise necessary to complete certain current and future hardware design projects as specified in the contract.

Unisys Corporation is an information management company with over 60,000 clients in more than 100 countries. The company is a major supplier of information services and technology to financial services, government, telecommunications, transportation, health information management and other commercial markets.

Cadence Design Systems, Inc. is the worldwide leader in the development and marketing of design automation software and services that accelerate and advance the process of designing electronic systems. Cadence combines leading-edge technology with a complementary set of services that enable customers to improve the quality and time-to-market performance of innovative electronic products. Cadence is based in San Jose, Calif. and employs approximately 2,400 people in research and development, sales and support locations worldwide.

CONTACT: Cadence Design Systems, Inc., San Jose

Michael Busselen, 408/944-7339

or

Unisys Corp., Blue Bell

Joe Barrett, 215/986-5904