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EDA/IP??

EDA market shows signs of weakness

Posted: 07 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:EDA? mixed-signal design? verification tool?

The EDA Consortium (EDAC) Market Statistics Service announced that the electronic design automation (EDA) industry revenue for Q1 declined 1.2 percent to $1,350.7 million compared to $1,366.8 million in Q1 07. The four-quarter average growth rate, which compares the most recent four quarters to the same quarters in the past year, was up 5.9 percent.

"Weakness in the large EDA companies was partly offset by strength in startups, with resulting numbers that were slightly down year-over-year," said Walden Rhines, chair, EDAC, and CEO and chairman, Mentor Graphics Corp. "Non-publicly traded companies fared better than publicly traded ones, with a four-quarter average growth rate of 8.3 percent, or a positive difference of 2.4 percent over the industry wide growth."

Slow growth
Main areas of strength were in leading-edge technologies such as electronic system level design, DFM, design for test, IC layout verification, IC/ASIC power analysis and RF/mixed-signal design. Unfortunately, since the numbers are not adjusted for inflation, or currency exchange fluctuations, the result seem to indicate an industry that, although not a losing ground, is growing only at a very sluggish pace.

Product category gains
EDA's largest category, computer aided engineering (CAE), generated revenue of $535.4 million in Q1, representing a 2.7 percent increase over the same period in 2007. The four-quarter moving average CAE growth rate was 10.6 percent. Electronic system level tool sales were particularly strong in this sector.

For IC physical design and verification, the next largest category, revenue decreased to $325 million in Q1 a 9.1 percent decrease compared to Q1 07. Place-and-route and custom design tools recorded noticeably weak sales figures, while DFM, design for test, IC layout verification, IC/ASIC power analysis and RF/mixed-signal design sectors all showed growth. The four quarters moving average growth rate increased 6.7 percent for those sectors.

PCB and multichip module (MCM) revenue decreased 1.4 percent over Q1 07 to $131.1 million. The four-quarter moving average growth rate for PCB and MCM showed a 4.7 percent decrease.

Semiconductor Intellectual Property (SIP) revenue totaled $271.4 million in Q1, a 1.7 percent increase over Q1 07. The four-quarter moving average growth rate for SIP was 1.2 percent. Inclusion of this category in the EDA revenue report has been controversial for some time, with critics accusing EDAC of "padding" the numbers by including these revenue figures. It is thus interesting to note that it had this revenue category been omitted from the four quarter moving average calculations, revenue growth would actually be closer to 7 percent, a much more reassuring number. For the quarter-to-quarter comparison, though, growth would have been lower than reported.

Services revenue was $87.8 million in Q1, down 0.8 percent from last year. The four-quarter moving average growth rate for services was 6.0 percent.

Revenue by regional consumption
North America, EDA's largest region, purchased $565.1 million of EDA products and services in Q1, which represents an 8.2 percent decrease compared to Q1 07. The four-quarter moving average growth rate was down slightly by 0.8 percent for North America.

Western Europe revenue was up 13.5 percent in Q1 compared to Q1 07, with revenues of $268.7 million. The four-quarter moving average growth for Western Europe was 11.2 percent.

Q1 08 revenue from Japan increased from 2.4 percent to $327.1 million compared to Q1 07. The four-quarter moving average increase was 7.9 percent for Japan.

The rest of world decreased to $189.8 million in Q1, down 2.5 percent from the same quarter in 2007. The four-quarter moving average growth was positive at 19.9 percent. It is impossible to extract figures for China and India from the report, because Rhines claimed that licenses used in these countries are purchased by multinational companies. "The only way is to extrapolate using figures for services and support available from publicly traded EDA companies that would give a figure of merit idea of the number of legal licenses deployed in those countries," he said.

- Gabe Moretti
Design News





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