By Emil Danielyan
The California-based company Cadence Design Systems, the world's largest supplier of electronic design technologies, has donated $20 million worth of software to a special information technology program at the Armenian State Engineering University (ASEU) sponsored by another U.S. firm.
The vice president of Cadence, Tom Malgesini, said on Wednesday the assistance, unprecedented for Armenia, is part of his company’s strategy of maintaining its dominance of the global market for semiconductor design software and services. He said it also reflects Cadence’s interest in Armenia as an emerging regional IT center.
“Currently we have 95 percent of the electronics designed in the world use our software,” Malgesini explained. “In order to continue to maintain such a high percentage, we need to continually invest in the people that know how to use our software. So the return for Cadence [from the Armenia project] is two to five years.”
Malgesini was speaking to journalists in Yerevan before signing the donation agreement with the ASEU rector and Vahram Mouradian, the Armenian-born chairman of LEDA Systems, a worldwide supplier of semiconductor components headquartered in Texas. Under the terms of the assistance LEDA, for its part, will spend $5 million on new computers and training personnel that will teach students how to design modern high performance semiconductor chips with the Cadence software.
The beneficiaries of the lavish aid are enrolled at the university’s Microelectronics and Circuits and Systems Inter-Departmental Chair which LEDA launched last year jointly with ASEU. Under an agreement signed with the university last year, the company's Armenian branch pledged to select 30 third-year students each year who will continue their studies under a special LEDA curriculum and join the company upon graduation.
The first group of students was selected in September. They will now learn to work with “electronic design automation” (EDA) tools, the main Cadence product widely used by computer, communication, and consumer electronics companies.
Mouradian said the assistance scheme will “drastically reduce” training and re-training expenses of LEDA’s Yerevan branch which now employs over 100 specialists and plans to double and possibly triple its staff in the coming years. He also argued that the U.S. software giant’s presence will spur the development of Armenia’s nascent IT sector.
“This is an exceptional and exciting event for the LEDA Systems Armenian Branch and the entire Armenian hi-tech sector,” he said. “Cadence’s entry into the Armenian market will turn Armenia into an electronic center of the region.”
Malgesini agreed, saying that “the high number of Cadence knowledgeable graduate students will enable Armenia to attract [foreign] semiconductor companies.” “We feel that we can build up Armenia to be an analog and mixed-signal [semiconductor] technology center,” he said.
The university rector, Yuri Sarkisian, also welcomed the scheme, saying that it “will make our university and its students competitive for jobs in the multi-billion dollar semiconductor design market.”
Headquartered in San Jose, California, Cadence is a global company with some 5,600 employees in over 30 locations. Its revenues totalled nearly $1.43 billion last year. Its interest toward Armenia highlights the fact that IT, and software development in particular, is one of the most promising and dynamic sectors of the struggling Armenian economy. Over two dozen Western, mainly American, IT firms have opened branches in the country in recent years, capitalizing on its skilled and relatively cheap labor.
Between 3,000 and 4,000 professionals are thought to be employed by the sector. Government officials estimate that its aggregate output jumped by 30 percent last year, with exports alone exceeding $20 million.
But industry executives warn that Armenia may be faced with a shortage of skilled specialists in the near future unless it improves its Soviet-era educational system. They say that with most of the available IT specialists already having jobs in or outside Armenia, the sector’s further growth requires a sustained influx of new cadres. The majority of young university graduates do not meet industry demands and need additional training after graduation.
This is why LEDA had decided to sponsor a university program geared toward its needs. The large-scale assistance from Cadence will give the program a further boost.
The importance of IT for Armenia’s broader economic development is recognized by Western donor states and lending institutions. Last December, the World Bank released a $5 million loan for the creation of a “business incubator” that will provide local IT start-ups with office space, computer facilities, training and relevant information.
Also, Armenia will be the first beneficiary of the European Union’s Caucasus Information Technology Initiative (CITI) announced at an international conference in Yerevan last month. The European Commission said it will allocate 1.8 million euros ($1.6 million) for the creation of an IT center in Yerevan.