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[GIBSON, DUNN & CRUTCHER LLP LETTERHEAD]

June 13, 2008

    (415) 393-8322

    C 18861-00008

(415) 374-8461

CERTAIN INFORMATION IN THIS LETTER HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT PURSUANT TO 17 C.F.R. § 200.83 HAS BEEN REQUESTED BY
CADENCE DESIGN SYSTEMS, INC. WITH RESPECT TO THE OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN
REPLACED BY [***].

VIA EDGAR AND MESSENGER

Kathleen Collins, Accounting Branch Chief

Patrick Gilmore, Senior Staff Accountant

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, N.E.

Mail Stop 4561

Washington, D.C. 20549

    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 Ms. Collins and Mr. Gilmore:

     On behalf of Cadence Design Systems, Inc., a Delaware corporation (“Cadence”), by this letter
I am responding to the comments of the Staff (the “Staff”) of the Securities and Exchange
Commission (the “SEC”) in the letter dated May 30, 2008 (the “Comment Letter”), relating to (i)

Kathleen Collins

Patrick Gilmore

Securities and Exchange Commission

June 13, 2008

Page 2

Cadence’s Annual
Report on Form 10-K for the fiscal year ended December 29, 2007 (the “2007 Form
10-K”), (ii) Cadence’s Quarterly Report on Form 10-Q for the period ended March 29,
2008, and (iii)
Cadence’s Definitive Proxy Statement filed March 25, 2008 (the “Proxy Statement”). For ease of
reference, the headings and numbered paragraphs below correspond to the headings and numbered comments in the Comment Letter. Each response of Cadence is set
forth in ordinary type beneath the corresponding Staff comment from the Comment Letter appearing in
bold type.

     This letter is being filed with the SEC on EDGAR supplementally as correspondence and a
complete copy of this letter in paper format is also being forwarded by courier. Please note that
this letter omits confidential information included in the unredacted version of the letter that
was delivered to the Division of Corporation Finance and that asterisks, as indicated below, denote
such omissions.

     Cadence respectfully requests, pursuant to the provisions of 17 C.F.R. § 200.83 (“Rule 83”),
that confidential treatment under the Freedom of Information Act (“FOIA”) (5 U.S.C. § 552) be
afforded to the redacted portions of Cadence’s responses bearing the confidential treatment request
identification code CDNS CTR 6/13/08 (the “Confidential Materials”). The Confidential Materials
are marked herein with bracketed asterisks (“[***]”), and the page on which they appear is marked
with the confidentiality legends required by Rule 83. Cadence believes that the Confidential
Materials contain information which is covered by one or more exemptions in the FOIA, for reasons
of business confidentiality. If any person who is not an employee of the SEC, including any other
government employee, requests an opportunity to inspect or copy the materials referred to herein,
pursuant to the FOIA or otherwise, Cadence requests in accordance with Rule 83 that it be promptly
notified of any such request and furnished with a copy of all written materials pertaining to such
request, so that it may further substantiate the foregoing request for confidential treatment.

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 important themes or other significant matters 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-wide factors
relevant to you; providing further information about how you earn revenues and income and
generate cash; and giving insight into material opportunities, challenges and risks, such as
those

Kathleen Collins

Patrick Gilmore

Securities and Exchange Commission

June 13, 2008

Page 3

    presented by known material trends and uncertainties, on which your executives are most
focused for both the short and long term, as well as the actions they are taking to address
these opportunities, challenges and risks. 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 which you discuss in your Part I disclosure but refer to only briefly in this
section.

    Cadence notes the Staff’s comment and will consider expanding its Overview section
in light of the Staff’s comment in applicable future filings with the SEC.

Revenue by Year, page 35

    2.

    Your discussion of your results of operations should include a narrative discussion of the
extent to which material increases in revenues from one period to the next were attributable
to increases in prices, increases in volume, or product innovations. See Item 303(a)(3)(iii)
of Regulation 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 identified 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.

    Cadence advises the Staff that it has considered the interpretive guidance in Item
303(a)(3)(iii) of Regulation S-K and Section III.D of SEC Release 33-6835 Interpretation:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“Section III.D of SEC Release 33-6835”) and believes that the material changes in revenues
from one period to the next are, and historically have been, primarily the result of changes
in the volume of new and renewal product licenses and the mix of license types executed in
each reporting period.

    Customer decisions regarding the size and duration of agreements, and the timing of
execution of agreements, are significant components of the changes in revenue from period to
period.   Similarly, because Cadence recognizes a significant portion of its revenue upon
delivery of licensed software, the license terms and types of agreements with customers can
impact revenue from period to period.

Kathleen Collins

Patrick Gilmore

Securities and Exchange Commission

June 13, 2008

Page 4

    Cadence advises the Staff that it does not believe that pricing is a material component of
the change in revenues from one period to the next.   Cadence’s management believes that due
to the multiple variables involved in Cadence’s pricing (e.g., license duration, product
configuration, discount levels, access rights such as the ability to use the products over a local area network or wide area network, remix rights, etc.), as well as the many
layers of quarterly ratable revenue, such analyses would have limited value to investors. Therefore, Cadence believes that a detailed
discussion of the pricing environment is not necessary, as it is not material to an
understanding of its results of operations. To this end, Cadence advises the Staff that it
highlighted in the “Results of Operations” section of the MD&A that it does not believe that
pricing volatility is a material component of the change in its revenues from one period to
the next. Cadence will continue to give consideration to Section III.D of SEC Release
33-6835 when preparing future filings and will continue to include quantitative disclosure
of material changes to the extent such disclosure is material to an understanding of the
change.

    Cadence advises the Staff that management believes disclosing the percentage of revenue for
each product group is sufficient to allow an investor to identify trends in our relative
competitiveness across the various product groups. Further, the quantification of changes
in product revenue described in the “Revenue By Year” section is readily computable by
applying the percentages shown in the “Revenue by Product Group” section. Cadence therefore
believes that it has provided the information that is material to an understanding of the
changes in revenue by year and that further quantification is not necessary to a material
understanding of the changes described.

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 feature being linked to the trading price of the 2023 Notes which
are traded in an observable market that differs from the one in which the Company’s common
stock is traded, the conversion feature meets the definition of a derivative that must be
accounted for separately at fair value. We also note that you issued Convertible Senior Notes
due 2011 and 2013 (2011 and 2013 Notes) with a similar conversion feature 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. Clarify 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 stock and how you determined that the 2011 and 2013 Notes were indexed to the Company’s
common stock.

    Kathleen Collins

    Patrick Gilmore

    Securities and Exchange Commission

    June 13, 2008

    Page 5

    Cadence advises the Staff that it believes the contingent conversion feature in both the Senior Convertible Notes
due 2023 and the Senior Convertible Notes 2011 and 2013 is indexed to Cadence’s own stock.

    When analyzing the conversion feature for the Senior Notes due 2011 and 2013, Cadence considered Emerging
 Issues Task Force (“EITF”) Issue 01-6 and concluded that the contingently exercisable conversion
 feature based upon a comparison of the trading price of the Notes to the trading price of the
 common stock (the parity feature) is “indexed to a company’s own stock” within the meaning of
 EITF Issue 00-19 and paragraph 11(a) of Statement of Financial
Accounting Standards (“SFAS”) No.
 133, Accounting for Derivative Instruments and Hedging Activities
(“SFAS 133”),
 because Cadence’s stock price, interest rates and credit risk are inherent in the economics
of the convertible notes. Paragraph 61(k) of SFAS 133 supports this view as it implies that when
an entity issues debt that is convertible into its own stock, the entity qualifies for the
 exception in paragraph 11(a) even though the conversion feature is also indexed to interest
rates and credit risk.

    In 2003, Cadence concluded upon the issuance of the 2023 Notes that the conversion feature linked
 to the parity feature did not qualify for the scope exception in paragraph 11(a) of SFAS 133.
 Cadence has since determined that Cadence’s stock price, interest rates and credit risk are
 inseparable components of the economics of the 2023 Notes and, accordingly, should qualify
for the scope exception in paragraph 11(a) of SFAS 133.  Although Cadence initially concluded that
 the parity feature required bifurcation, changes in the fair value of the parity feature were
 not recorded in the financial statements for any periods subsequent to the issuance of the 2023
 Notes as the amounts were considered insignificant.  In future filings, Cadence will remove the
 disclosure relating to the fourth conversion feature of the 2023 Notes and will include additional
 disclosure consistent with the disclosures made in connection with
the 2011 and 2013 Notes.

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 unrecognized tax benefits. Please provide more insight as to the reasons
for the benefit recognized upon adoption of FIN 48. For instance, tell us what threshold was
applied in recognizing your tax liability prior to the adoption of FIN 48 and tell us to which
tax positions these adjustments relate.

    The primary factors driving the $102.0 million decrease in the liability for unrecognized
tax benefits included:

    i. Change in recognition of “gain contingencies” under FIN 48.

    Kathleen Collins

    [***] Confidential Treatment Requested

    Patrick Gilmore

    Pursuant to 17 CFR § 200.83

    Securities and Exchange Commission

    by Cadence Design Systems, Inc.

    June 13, 2008

    Page Code Number CDNS CTR 6/13/08-1

Page 6

    Prior to the adoption of Financial Accounting Standards
Board’s  (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income
Taxes – An Interpretation of FASB Statement No. 109 (“FIN 48”), Cadence had certain tax
positions which if sustained
would result in tax refunds or reductions in income taxes payable. Consistent with the principles of paragraph 17 of SFAS No. 5,
Accounting for Contingencies (“SFAS 5”), Cadence did not recognize these potential gains
prior to realization. Unlike SFAS 5, FIN 48 applies a single recognition threshold that
applies to both “loss contingencies” and “gain contingencies”. Accordingly, upon adoption
of FIN 48, Cadence recognized approximately [***] of gain contingencies using the
recognition threshold of more-likely-than-not. During the course of the recent Internal
Revenue Service (“IRS”) examinations of its tax returns in which the IRS proposed
adjustments to Cadence’s transfer pricing arrangements with certain of its foreign
subsidiaries, Cadence made counter claims for offsetting transfer pricing adjustments that
were not originally reported on its tax returns, which if ultimately allowed by the IRS,
would result in tax refunds or reduce the tax payable upon effective settlement. Because
Cadence’s claims for these offsetting transfer pricing adjustments remained subject to the
approval of the IRS, including the Appeals Office of the IRS, Cadence considered these tax
positions as unrealized gain contingencies under SFAS 5. Upon adoption of FIN 48, Cadence
deemed that these tax positions did meet the more-likely-than-not recognition threshold and
measured the largest tax benefit that is greater than 50 percent likely of being realized
upon effective settlement with the taxing authority. These claims for offsetting transfer
pricing adjustments, accounted for [***] of the [***] decrease in the liability for
unrecognized tax benefits. The remaining [***] of reduction of liability for unrecognized
tax benefits resulted from the application of the FIN 48 recognition and measurement
standards to other individual gain contingencies that Cadence does not consider to be
individually significant.

    ii. Change from the SFAS 109 / SFAS 5 recognition threshold of “probable” to
the FIN 48 “more-likely-than-not” recognition

     threshold.

    Prior to the adoption of FIN 48, Cadence provided for tax liabilities on its Consolidated
Balance Sheets unless it was deemed probable that a tax position would be sustained. Upon
adoption of FIN 48, Cadence lowered the recognition threshold to more-likely-than-not which
resulted in increased tax benefits from certain tax positions that were more-likely-than-not
to be sustained solely on technical merits but did not meet the previously applied threshold
of probable for recognition. Caden