The semiconductor sector is in fine shape these days. Demand for consumer-level computers, smartphones, and general gadgetry has recovered from the dark days of 2008 and 2009, and the logical result is rising investment in chip-manufacturing facilities and new semiconductor designs.

That's where Cadence Design Systems (Nasdaq: CDNS) comes into play. The maker of electronics design software, or EDS, packages is breaking fresh yearly highs on the heels of a fine fourth-quarter report. Revenue jumped by 13% year over year, to $249 million.

It doesn't hurt Cadence any to be a part of the chip-manufacturing alliance between IBM (NYSE: IBM), Samsung, mobile-processor architect ARM Holdings (Nasdaq: ARMH), and former Advanced Micro Devices division GlobalFoundries. The association gives Cadence access to that federation's many partners in need of microchip design software, putting Cadence at the epicenter of the mobile computing movement -- arguably the biggest growth driver in technology today.

Still, Cadence doesn't quite face blue skies ahead. The company is improving its gross margin quarter by quarter, but what looks like undisciplined cost controls don't allow improvements to flow all the way to the bottom line, and actual earnings are sporadic at best. Cadence reported a GAAP net loss of $21.2 million this quarter, though restructuring and stock-based compensation adjustments brought the red ink back into the black.

Rival Ansys (Nasdaq: ANSS) gets a lot more love from our CAPS community, but Mentor Graphics (Nasdaq: MENT) ties Cadence's underwhelming two-star ranking. If you think the company deserves better -- or worse, for that matter -- it's easy enough to swing by and add your "outperform" or "underperform" call on the stock right now.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.