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EDA saw double-digit growth in Q2, says EDAC

Posted: 05 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:EDA Consortium? EDAC? EDA revenue? Synopsys? Gartner?

The EDA Consortium (EDAC) said Monday that EDA revenue reached an all-time high in the second quarter, topping $1.25 billion, an increase of 15 percent from the same period of 2005. Coupled with Q1 growth of 10 percent in June, the first two quarters of the year marked the first time in more than five years that EDA has strung together consecutive quarters of double-digit growth, according to historical EDAC figures.

Aart de Geus, chairman and CEO of Synopsys Inc., said the sudden surge in EDA growth can be attributed primarily to a lengthy convalescence by semiconductor companies from the cataclysmic downturn of 2001. According to de Geus, who is also the current EDAC chair, chip companies have been cautious in the intervening years, gradually putting better business practices and inventory management systems in place, but postponing returning R&D and EDA tool investment levels to pre-crash heights until relatively recently.

"What we are seeing right now is an increase in aggressiveness" in moving to the next technology node, de Geus said. "People are moving faster to 90- and 65nm. I sense somewhat of a renewal by companies of focusing on how to innovate."

De Geus, however, was hesitant to say EDA has returned to the "good old days" of consistent double-digit growth rates, saying high-tech industriesand particularly the semiconductor industryhave fundamentally matured between the 1990s and the present day. "In general, it feels like we are better off, that the natural delay that exists [in cycles between] semiconductors and EDA has now manifested itself in a positive sense for EDA."

Gary Smith, chief EDA analyst at Gartner Dataquest Inc., reacted even more cautiously. EDA is still "transitioning out of the doldrums," he said, and needs to provide customers with needed tools to approach the consistent growth rates of years past.

Pointing to the differences in revenue tracking mechanisms between EDAC and Gartner, Smith said EDA is seeing cyclical buying activity of tools for 65- and 45nm, but that Gartner is not seeing double-digit growth anywhere except in the market for ESL tools.

New company participation
EDAC noted that the 15 percent year-to-year increase in EDA revenue was due in part to new company participation. Though the organization does not provide a detailed breakdown of participating company revenue, de Geus said his own analysis of the numbers for the quarter concluded that EDA revenue would have been up roughly 13 percent without the new companies.

EDAC said Q2 revenue for its largest tool category, computer-aided engineering, reached $511 million, 15 percent more than the same period in 2005. IC physical design and verification revenue increased 19 percent, IP revenue was up 17 percent and services revenue increased by 20 percent, EDAC said. Among the tool categories, only PCB and multi-chip module tools revenue slippedby 4 percent.

Regionally, EDAC said Q2 revenue was up year-to-year across the board. North America, the largest consumer of EDA tools, spent $598 million on EDA in the Q2. Revenue from Western Europe was up 18 percent, from Japan up 11 percent and from the rest of the world 27 percent. Total Q2 EDA revenue reached $1.256 billion, eclipsing the previous high of $1.253 billion in Q4 of 2005.

- Dylan McGrath
EE Times

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