SecProbe.io

Mail Stop 4561         May 30, 2008  Michael J. Fister President and Chief Executive Officer Cadence Design Systems, Inc. 2655 Seely Avenue, Building 5 San Jose, CA 95134
Re: Cadence Design Systems, Inc.
 Form 10-K for the Fiscal Year Ended December 29, 2007
Filed February 26, 2008 Form 10-Q for the Quarterly Period Ended March 29, 2008 Filed April 25, 2008 Definitive Proxy Statement Filed March 25, 2008
 File No. 001-10606

Dear Mr. Fister:

We have reviewed the above-referenc ed filing[s] and have the following
comments.  If indicated, we think you shoul d revise your document in response to these
comments.  If you disagree, we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Pl ease be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide us with supplemental information so we may better understand your  disclosure.  After reviewing this
information, we may raise additional comments.
 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for the Fiscal Year Ended December 29, 2007

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Overview, page 27
1. Please consider expanding this section to provide a balanced, executive-level
discussion that identifies the most importa nt themes or other significant matters

Michael Fister
Cadence Design Systems, Inc.
May 30, 2008 Page 2
with which management is concerned primarily in evaluating the company’s financial condition and operating results.  This should include, but is not limited to, discussing economic or industry-wi de factors relevant  to you; providing
further information about how you earn re venues and income and generate cash;
and giving insight into materi al opportunities, challenges and risks, such as those
presented by known material trends and uncertainties, on which your executives are most focused for both the short and l ong term, as well as the actions they are
taking to address these opportunities, challenges and risk s.  See Item 303(a) of
Regulation S-K and SEC Release No. 33-8350.  For example, consider discussing
how management is responding to specific challenges facing your industry, such as the migration to nanometer design whic h you discuss in your Part I disclosure
but refer to only brie fly in this section.
 Revenue by Year, page 35

2. Your discussion of your results of ope rations should include a narrative
discussion of the extent to which material  increases in revenues from one period
to the next were attributable to increase s in prices, increases in volume, or product
innovations.  See Item 303(a)(3)(iii) of Re gulation S-K.  Furthermore, please tell
us what consideration you gave to quantifying the extent of contribution of each source of a material change you have identi fied in this subsection, pursuant to the
interpretive guidance in Section III.D of  SEC Release 33-6835 Interpretation:
Management’s Discussion and Analysis of Financial Condition and Results of
Operations.  The chart appearing in the next subsection under the heading
“Revenue by Product Group” sets forth the relative increases and decreases
between product groups, but does not provide  any information regarding absolute
increases or decreases in dollar or percentage terms.
 Note 6. Convertible Notes, page 82

3. We note in your disclosure related to your Senior Convertible Notes due 2023
(2023 Notes) that due to the conversion feat ure being linked to the trading price of
the 2023 Notes which are traded in an obser vable market that differs from the one
in which the Company’s common stock is  traded, the conversion feature meets
the definition of a deri vative that must be accounted for separately at fair value.
We also note that you issued Convertib le Senior Notes due 2011 and 2013 (2011
and 2013 Notes) with a similar conversion fe ature that is linked to the trading
price of the 2011 and 2013 Notes although you have not accounted for this
conversion feature separately  at fair value.  Clarif y why you are accounting for
this conversion feature differently for the 2023 Notes and the 2011 and 2013
Notes.  In this regard, clarify how you determined that the 2023 Notes were not
indexed to the Company’s common stoc k and how you determined that the 2011
and 2013 Notes were indexed to  the Company’s common stock.

Michael Fister
Cadence Design Systems, Inc.
May 30, 2008 Page 3  Note 8. Income Taxes, page 86

4. We note that upon adoption of FIN 48 the Company recognized a decrease of
$102.0 million in the liability for unr ecognized tax benefits.  Please  provide more
insight as to the reasons for the benef it recognized upon adoption of FIN 48.  For
instance, tell us what threshold was app lied in recognizing your  tax liability prior
to the adoption of FIN 48 and tell us to which tax positions these adjustments relate.
5. We note in your disclosures on page 88 that the IRS proposed to assess an
aggregate tax deficiency for the ta x years 2000 through 2002 of approximately
$318 million and that you have filed a pr otest with the IRS through the Appeals
Office since you believe that the proposed adjustments are inconsistent with the
applicable tax laws.  Tell us whether you have accrued and/or paid any portion of
this deficiency and provide us with your analysis under FIN 48 as it relates to this
uncertainty.  In your response, tell us  how you considered the December 2007
settlement with the IRS related to transfer pricing arrangements with a foreign subsidiary in determining your accrual, if any, since a portion of the $318 million
deficiency relates to transfer pricing a rrangements with foreign subsidiaries.
Also, considering a portion of the assessment relates to the “deferred recognition” of proceeds received from restitution and settlement in connection with litigation,
tell us the amount, if any, that is included in deferred taxes related to such income
or tell us how you accounted for the ta xes applicable to this “deferred
recognition.”  Also, tell us what amount , if any, of the $152 million assessment
relates to penalties and interest.
6. Please tell us why the deferred tax as set for tax credit carryforwards ($79.1
million) is greater than the actual ta x credits of $29.2 million (federal $10.3
million, California $14.3 million and other states $4.1 million).
 Definitive Proxy Statement filed March 25, 2008

Compensation Discussion and Analysis

Annual Cash Incentive, page 27
7. Your disclosure indicates that the Comp ensation Committee establishes the target
bonus for each of the company’s named executive officers based on the
methodology outlined in the “Compensation Determinations” discussion appearing on page 25.  However, the narrative discussion following your Summary Compensation Table appears to indi cate that the target bonuses for each
of your named executive officers are sp ecified in each officer’s employment
agreement.  Please explain.  Also, to the extent that the target bonus established
for any of your named executive officers for 2007 differs from the target bonus

Michael Fister
Cadence Design Systems, Inc.
May 30, 2008 Page 4
specified in that officer’s employ ment agreement, please disclose  that target
bonus.

Cadence Group Modifier, page 27

8. In future filings, consider disclosing the value of the Cadence Group Modifier,
and how it was calculated, with respect to each named executive officer.  While
you disclose the target levels underlyi ng the company performance modifier, you
do not disclose how the actual annual bonus es were calculated for each named
executive officer, based on the company performance modifier and the business
objectives modifier, as applicable.  See Item 402(b)(1)(v) of Regulation S-K.
 Long-Term Equity Incentive Compensation, page 28

9. You do not appear to disclose how you calculated the actual long-term equity
incentive awards paid to your named execu tive officers in 2007.  Please tell us
how these awards were determined for 2007, with a view towards including this
type of disclosure in future filings.
 Form 10-Q for the Quarterly Period Ended March 29, 2008

 Item 4.  Controls and Procedures

Evaluation of Disclosure Cont rols and Procedures, page 34
10. We note your statement that your prin cipal executive officer and principal
financial officer have concluded that the company's disclosure controls and
procedures are “sufficiently” effective.  The inclusion of such qualifying language
does not conform to the requirements of Item 307 of Regulation S-K.  Please
confirm that your disclosure controls and procedures were effective as of the end
of the period covered by this  report and revise your future filings to remove this
qualification. You must clearly state whether the officers concluded that the
company's disclosure controls and procedures were effective.

* * * * * * *

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.  Please  submit all correspondence and supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T.  If you amend your
filing(s), you may wish to provide us with marked copies of any amendment to expedite our review.  Please furnish a cover letter that keys your response to our comments and provides any requested information.  Detailed co ver letters greatly faci litate our review.

Michael Fister
Cadence Design Systems, Inc. May 30, 2008 Page 5  Please understand that we may have addi tional comments after reviewing any
amendment and your response to our comments.
 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:

• the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
• the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
 You may contact Patrick Gilmore, Senior  Staff Accountant, at (202) 551-3406 if
you have any questions regard ing comments on the financia l statements and related
matters.  Please address questions regardi ng all other comments to Matthew Crispino,
Staff Attorney, at (202) 551-3456 or David Or lic, Special Counsel at (202) 551-3503.  If
you need further assistance, you ma y contact me at (202) 551-3499.
        S i n c e r e l y ,           Kathleen Collins
Accounting Branch Chief