And then on top of that, there are certain thematic things that we are investing in. And then the three that I want to highlight, which is €“ which I think will be thematic for years to come. One is, of course, AI. AI will have a big effect on, like I mentioned, design work. And that’s true for both semi and system companies. Second is 3D-IC, the emergence of chiplets and heterogeneous integration, and Cadence is the best positioned to take advantage of this. And then the third area is this move to systems, system design and analysis and our engagement with system companies are similar, to a lot of extent, with semi companies. Everybody wants to do more with less now, so the benefits of AI and productivity and better results are there in both set of customers.
But of course, our emerging portfolio and system design and analysis provides unique value to our system companies because we are no longer talking to the chip designers. We’re talking to the system designers, the architect, the coupling of the mechanical and the electrical designs uniquely positions us. This convergence is going to happen between system and semi, between electrical and mechanical. And there is no other company better positioned than Cadence to take advantage of this, okay? So overall, to answer your question, these are the three big themes on top of the base. See the base is always important, the best-in-class of the basic algorithms. But AI, 3D-IC and systems will be with us for years to come.
Jay Vleeschhouwer: Thanks, Anirudh.
Operator: Our next question comes from Harlan Sur from JPMorgan. Please go ahead. Your line is open.
Harlan Sur: Yes. Good afternoon. Thanks for taking my question. So on hardware verification, you guys have, sounds like, very good visibility to the first half of the year. I know the team still has some concerns on maybe more discretionary-type spending pullback here. But we’ve also talked about how these hardware platforms are becoming a need-to-have, right, not a nice-to-have but a need-to-have as it relates to these very complex digital SoC platforms. We’re well into the semiconductor industry downturn. I would have assumed that you would have already seen some cancellations in orders or pushouts in hardware shipments if customers were concerned. So has the team seen any of this type of activity? I’m just trying to figure out what’s driving the conservatism here on hardware.
Anirudh Devgan: Well, thanks for the question. This is Anirudh. I think you said it. I think what we see is the hardware is no longer €“ I know it could be part of CapEx, but it’s no longer discretionary spend for our customers. I mean, any chips that are designed today, any complex chips, you have to use these hardware platforms to verify them. And if you don’t verify them properly, then you spend all this money, the chips comes back and it doesn’t work. I mean, that’s a big no-no, right? It delays the whole product and the expense. So hardware platforms, both Palladium and Protium are no longer nice-to-have. You need to have them, okay? And then we have also strengthened our portfolio by not just chip verification but software bring-up.
Chip verification has been traditional sense of Palladium. And now with bring us with Protium, we provide a unique. So, so far, the demand is strong. And we had a record year last year. These days, we have €“ I think we had the record year, year after that, too. But we see continued growth in hardware. And we are very pleased where our competitive position in hardware. We are very pleased with the demand as €“ it’s no longer nice to have. It is no longer discretionary. And also in multiple end markets, so what happened is like we talked about automotive, right? So automotive also has much higher complexity chips now. So the other thing with hardware is it is also expanding to other end markets, whereas traditionally, the big chips used to do it like data center chips.
