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Q3 2010 EDA revenue hits $1.3 billion

Posted: 13 Jan 2011 ?? ?Print Version ?Bookmark and Share

Keywords:EDA? market report? Walden Rhines?

The EDA Consortium (EDAC) Market Statistics Service (MSS) reports that global revenue for EDA totaled $1,307 million in Q3 2010. Also, revenue was up 6.9 percent sequentially, and up 11.9 percent over Q3 09. The four-quarters moving average also increased by 4.9 percent.

Walden Rhines, EDAC chair and chairman and CEO of Mentor Graphics Corp. noted, "There has, indeed, been quite an improvement in Q3 10 EDA revenue versus last year." He added, "Traditionally, EDA revenue recoveries have lagged behind the semiconductor industry recoveries by about one year. While EDAC only reports data and takes no position on its meaning, individual companies, such as Mentor Graphics, have expressed optimism in their Q3 earnings reports and have suggested that the timing of the improvement in EDA is similar to previous recoveries."

Rhines enumerated the categories with the most notable sequential increases in Q3 2010 were CAE, IC physical design and verification, and semiconductor IP.

CAE was up 13.9 percent over the same period in 2009, at a revenue of 512.8 million in Q3 2010 and IC physical design and verification was up 11.8 percent year-to year increase at a revenue of $291.6 million. While semiconductor IP revenue was $298.5 million in Q3 2010, up 24 percent compared to Q3 2009.

PCB and multichip module revenue, however, decreased by 5.4 percent to $125.7 million, and services revenue dropped by 6 percent to $78.5 million compared to the same period last year.

According to the EDAC report, revenue increased y-on-y in every consuming region.

Ranking first, the Americas purchased $577.2 million of EDA products and services in Q3 2010, up 12.9 percent compared to Q3 2009.

Revenue in EMEA climbed by 9.9 percent y-on-y while Q3 2010 revenue from Japan decreased 7.1 percent to $231.2 million compared to Q3 2009.

For the second consecutive quarter, the Asia-Pacific region has overtaken Europe and Japan as a consumer of EDA software and services and has benefited the most from sales in Q3 2010.

Revenue for Asia Pacific represented $274.3 million in Q3 2010, a 34.6 percent increase compared to Q3 2009. The four-quarters moving average increased 28.9 percent.

"EDAC data shows that almost all of the net growth of EDA license and maintenance revenue of the last decade was generated by the Asia-Pacific region," noted Rhines . "While EDAC doesn't provide a forecast, most of our member companies have indicated that they continue to see good growth from the Asia-Pacific region and expect it to continue in the future. Most of this growth has been driven by the Asia-Pacific design activities of multi-national companies but regional companies are growing their use of EDA."

2011 guidance
EDAC does not forecast the future. Rhines , however, accepted to speak as the CEO of Mentor Graphics and reiterated the guidance he provided during the company's Q3 investor call, notably for a strong y-on-y growth in Q4 10 and for the total year of calendar 2010.

Rhines said "Driving that growth outlook were several trends including rapid adoption of 32/28nm technology, increasing functional complexity that requires emulation as well as simulation for verification, growing adoption of ESL (electronic system level) design and new applications for EDA such as automotive and aerospace designs."

Broadening the scope of the discussion, EE Times asked Rhines if 2010 could be qualified as the year of system-level design. He replied that both the year 2010 and the entire decade have shown increasing momentum for system-level design. "The key change in 2010 was the broadening of EDA participants to include all of the leading EDA suppliers," he explained.

And, asked what word he thinks best describes 2010, Rhines replied "transition," explaining that after zero growth in 2009, "2010 has been a year of accelerating revenue growth."

The final question concerned whether more consolidations in the EDA sphere are to be expected in 2011. Rhines declared, "In the late 1990's, there were typically about 20 companies acquired each year. In this decade we have slowed to about ten per year. At least part of the reason has been the slowdown in creation of new venture capital-funded EDA companies. There has been a reasonable amount of acquisition activity this year and there is no reason to expect any significant change in the future."

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