Chip startup alleges Cadence sabotaged processor rollout

Tachyum blames deep conflicts of interest as source of Prodigy delays


Exclusive Server chip startup Tachyum has been plagued by delays producing its Prodigy Universal Processor, which meshes CPU, GPU and AI-geared matrix units in a single architecture.

Now the company claims the holdup was caused by failures on the part of chip and system components IP giant Cadence Design Systems.

Tachyum had tapped Cadence to provide chip design blocks to help bring the Prodigy family to market. This is pretty typical for startups: rather than design a whole chip yourself, it's more feasible to focus on your component's unique features and license standard IP blocks for things like memory and IO interfaces.

At issue here is more than mere allegations that Cadence breached its contract with Tachyum regarding these IP elements. Tachyum alleges shortcomings in these deliverables were the result of sabotage at the highest levels within Cadence — as high as Lip-Bu Tan, who was CEO of Cadence during the span of events Tachyum outlines.

Tachyum claims that a 2019 deal in which Cadence would provide standard chip IP central to its Prodigy processors was breached as Cadence was unable to provide the necessary technology to bring the product to market. The blocks Tachyum wanted were not novel, and Cadence engineers who consulted with Tachyum appeared confident the standard parts could be readily integrated per the IP agreement, according to a lawsuit Tachyum has filed against Cadence.

That complaint states "these [IP] elements were supposed to be off-the-shelf technology that could be delivered quickly to meet Tachyum's critical product development timeline so as to be first-to-market with its Universal Processor. However, catastrophic failures plagued each component, in some cases leading Cadence to advise Tachyum not to use the components and/or to obtain them from other vendors."

Tachyum claims this created delays that constitute $206 million in lost earnings, which the startup hopes to recoup via the courts, in addition to $27 million for the added costs of finding other companies to add necessary IP on short notice.

Tachyum also points to specific large-scale system procurements and pre-orders it said it lost because of these delays, including the MareNostrum 5 supercomputer at the Barcelona Supercomputing Center (BSC), where a Memorandum of Understanding had been signed to make way for cooperation between BSC and Tachyum but eventually went to Atos.

Atos went on to use processors "supplied by Nvidia, an American company, because, on information and belief, no European company could supply processors meeting the key selection criteria. The EuroHPC Joint Undertaking stated in its bid call that the estimated total value for the project is €151,410,000, equating to approximately $159,000,000 at current exchange rates. Tachyum has been damaged by that amount or a substantial portion thereof," the complaint details.

... the failures were not the result of incompetence but of a deliberate attempt by Cadence to sabotage Tachyum's effort to be first-to-market with a Universal Processor

The full complaint [PDF], filed in a Silicon Valley Superior Court of California, details a long list of specific alleged failures to deliver, particularly on the IP front, although many are redacted. The central argument is that Cadence deliberately tried to derail Tachyum's roadmap by failing to hand over the required chip blocks.

"The fact that Cadence — a well-established leader in its field — failed on so many fronts involving industry-standard components that its competitors were able to provide and that were merely the most current generations of technology that Cadence itself had implemented in the past, led Tachyum to suspect that the failures were not the result of incompetence but of a deliberate attempt by Cadence to sabotage Tachyum's effort to be first-to-market with a Universal Processor," Tachyum's filing states.

The complaint continues, focusing on potential conflicts of interest:

"Tachyum's suspicions grew deeper when it learned that Cadence's then-CEO, Lip-Bu Tan, was on the board of directors of two of Tachyum's competitors and was heavily involved in two investment funds that had invested in other competitors—a clear conflict of interest. Another Cadence board member, Young Sohn, is also a principal in one of those investment funds."

Lip-Bu Tan is chairman of the board at competitor SambaNova and Nuvia (acquired by Qualcomm in 2021) and has a leadership role at two VC firms (Walden International and Walden Catalyst) which both invest in other chip startups. "These positions held by Mr Tan presented clear conflicts of interest," Tachyum claimed.

According to Tachyum, Cadence wooed the startup by talking up its solid reputation and previous work with Tachyum's founder. The suit alleges that "Cadence intended to induce Tachyum to choose Cadence over competing vendors ... Tachyum had informed Cadence of its needs and requirements, and each of Cadence's misrepresentations was tailored to convince Tachyum that Cadence could and would meet those needs and requirements."

Since the specific IP has been redacted in the documents, we will point to one rosy press release detailing the standard parts Tachyum worked with Cadence to secure. Run of the mill memory controllers and other IP elements are named, none of which represent novel technologies. It is conjecture on our part that these are part of the IP elements that were allegedly not delivered according to the IP agreement.

Ultimately, Tachyum says it lost approximately two years of engineering cost and other operating expenses attempting to work with Cadence, and its failure to deliver the promised IPs also stalled Tachyum's development and commercialization of its Prodigy processor, "causing lost profits and increasing Tachyum's cost of Tachyum's access to capital."

The startup adds in the court documents that "Cadence compounded the harm by ending Tachyum's access to eDAcard software, thereby causing Tachyum to incur expense from licensing replacement software, retraining Tachyum engineers to use the replacement software, and using the replacement software to recreate processor components. The delays caused by Cadence's termination of access to eDAcard software will also cause Tachyum to lose customers, revenues, and profits. Tachyum claims monetary damages of at least $206 million in connection with these harms, which continue to accrue to Tachyum."

A jury trial has been requested and the final amounts could change, especially since damages continue to mount in the form of lost deals and time in the market.

We have reached out to Cadence and will update this story when we hear back. The complaint, unreported until now, was filed mid-July. ®


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