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EDA posts sixth consecutive dip in Q2

Posted: 02 Oct 2009 ?? ?Print Version ?Bookmark and Share

Keywords:EDA market decline? IC design? intellectual property?

Q2 revenue by segment and geographic region (Click on image to enlarge.)
Source: EDAC Market Statistics Service

EDA revenue slipped y-on-y for the sixth consecutive quarter in Q2, the longest string of successive declines since at least 1997, according to the EDA Consortium (EDAC).

Total EDA revenue slipped to $1.13 billion in Q2, down 15 percent compared to the same quarter last year, according to a report by EDAC's Market Statistics Service. Revenue was down 5.6 percent compared with Q1, EDAC said. The four-quarter moving average declined 13.9 percent, according to the trade group.

"It's fairly normal for EDA to lag behind the semiconductor industry in a recovery," said Walden Rhines, EDAC chair. Rhines, who is also chairman and CEO of Mentor Graphics Corp., said the semiconductor industry recovery didn't get going until March.

Asked how far EDA usually lags the semiconductor industry in a recovery from a downturn, Rhines said it tends to be several quarters, historically. But he said the industry has never experienced a downturn quite like the one that emerged at the end of last yearwith a very steep drop in revenue followed a few months later by a sharp rise.

Some would suggest that, based on this, EDA could expect a similarly sharp recovery, Rhines said.

The six successive quarters of y-on-y decline, stretching back to Q1 08, is the longest consecutive string since EDAC began keeping the data in 1997, according to the organization.

Revenue from computer aided engineering, EDA's largest product category, was $449.7 million in Q2, down 12.2 percent from the second quarter of 2008.

Source: EDAC Market Statistics Service

IC physical design and verification revenue decreased to $270.6 million in Q2, down 12.8 percent from the same quarter of 2008, EDAC said. PCB and multi-chip module revenue declined 24.1 percent to $105.8 million, while semiconductor intellectual property revenue decreased by 16.3 percent to $221.6 million, EDAC said.

Services revenue was $77.8 million in Q2, a decrease of 28.6 percent compared to the year-ago period, EDAC said.

Rhines noted three areas of relative strength in the EDAC Q2 numbers. Revenue from hardware-assisted verification was up a modest 6.5 percent y-on-y, he said, while IC and ASIC signal integrity revenue was up nearly 8 percent. Resolution enhancement revenue grew nearly 50 percent y-on-y, Rhines said.

Rhines said resolution enhancement is closely related to design-for-manufacturing, and said this area has been the largest driver of EDA growth over the past decade.

Source: EDAC Market Statistics Service

Revenue decreased across all regions, EDAC said. Sales of products and services in the Americas region declined 11.5 percent y-on-y to $509 million, EDAC said.

Rhines noted that the decline in revenue in the Americas region was the smallest of any region, a break from a recent trend which has shown other regions grow at a faster rate or decline by a smaller percentage compared with Americas.

Companies that were tracked employed 26,298 people in Q2, down 1 percent from Q1, EDAC said.

- Dylan McGrath
EE Times

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