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EDA revenues decline in third quarter

Posted: 28 Dec 2004 ?? ?Print Version ?Bookmark and Share

Keywords:eda? ic physical design?

A falloff in North American revenues resulted in a 3 percent decline in EDA license and maintenance revenue in the third quarter of 2004, according to a report issued Wednesday (Dec. 22) by the EDA Consortium's Market Statistics Survey (MSS).

Weakness in the IC physical design market also contributed to the year-to-year decline.

According to the MSS report, total third-quarter EDA revenue, including semiconductor property (IP), was $953 million, a two percent decrease from the third quarter of 2003. But year-to-date EDA revenues are up three percent through the third quarter of 2004, noted Wally Rhines, EDA Consortium chairman and Mentor Graphics CEO.

The EDAC MSS report follows by several weeks Gartner Dataquest's EDA Market Trends report, which predicted flat growth in 2004 due to a lack of tools for 65 and 45 nm chip design. That report also said that the electronic system level (ESL) market took a "major hit" in 2003, a contention disputed by EDA vendors.

The revenue shortfall cited in the EDA Consortium's MSS report came entirely from North America, down 9 percent to $472 million in the third quarter of 2004. Europe was up four percent, Japan was up four percent, and "rest of world" continued its double-digit growth in recent quarters with an 11 percent jump.

Rhines said he wasn't sure why North America showed such a decline, although he noted that the third quarter was "a period of great uncertainty" for semiconductor vendors. "There was weakness in the semiconductor industry that some were concerned might be the start of the next semiconductor recession, or perhaps just an inventory correction," he said.

Rhines also speculated that outsourcing had something to do with the geographical shift. "Rapid growth in rest of world, which is primarily India and China and Taiwan, indicates that more and more EDA licenses are being consumed in Asia as a percent of the total world," he said.

Among tool categories, IC physical design and verification was down 9 percent in the third quarter. But, Rhines noted, IC verification actually did well, and power and transistor-level analysis tools were strong.

"Whether people need new tools for physical layout isn't clear to me, but they clearly need some additional analysis tools for things like signal integrity," Rhines said.

Asked about the Gartner Dataquest report, Rhines said he was unsure what tools are needed at 45 nm that are not needed at 65 or 90 nm, except for resolution enhancement technology (RET). "That's the only thing that has a big jump-up with each new geometry, and RET was strong, up over 40 percent for the year," he noted.

Rhines also said that ESL was up 16 percent year-over-year for the third quarter. Other bright spots included emulation, formal verification, and analog-mixed signal cores. Semiconductor IP rose 8 percent, but that's partially due to the inclusion of new vendors in the MSS numbers.

"We are seeing very modest growth for the year," Rhines said. "The recovery is yet to come."

- Richard Goering

EE Times

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