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Industry News

EDA Consortium Reports Revenue Increase for Q1 2010

By John Donovan

The EDA Consortium Market Statistics Service today (7/12/10) announced that the Electronic Design Automation (EDA) industry revenue for Q1 2010 was $1,247 million, a 4.6 percent increase compared to $1,192.1 million in Q1 2009. Sequential EDA revenue declined 1.2 percent, while over the last four quarters it declined 5.9 percent. “Led by increases in the CAE and Semiconductor IP categories, the EDAC revenue numbers show an increase over Q1 2009,” said Wally Rhines, EDAC chair and chairman and CEO of Mentor Graphics in a statement.

It’s not clear whether Q1 represented a trend or an aberration. Samsung’s settlement with Rambus—totaling approximately $900.0 million over a five-year period—certainly skewed the results, and in a relatively small market like EDA, not trivially. Overall the market was up over Q1 2009, thanks to the semiconductor IP (SIP) segment, where Rambus plays. We’ll find out in Q2 whether that increase is sustainable or was just a Rambus pop.

The market growth resulted from two factors: the strong growth in SIP and the strength of the Asian market. SIP far outperformed the other sectors, as the table shows:

Q1 EDA sales

The other factor supporting the market was strong growth in Asia, which more than made up for relatively flat markets in the U.S., Europe and Japan:

Q1 regions

How soon will the EDA industry recover from the recession? Low-Power Design asked Mentor Graphics CEO Wally Rhines, who had this take: “Traditionally in EDA when the semiconductor industry recovers from a recession, it takes a while before they start buying more EDA software. Usually there’s a delay of a year or so while they recover and get their R&D back in line as a percent of revenues before they increase their spending on design software.”

Since the semiconductor industry is currently showing signs of recovery and the SIA predictions are cautiously bullish, assuming the economy holds together we’d normally expect to see another year of declining markets everywhere other than Asia. However the EDA market growth in Asia may be more than enough to offset modest declines elsewhere. As Rhines pointed out, “This isn’t just about China—it’s also India, Korea and Taiwan,” where not only are multinational firms establishing more design centers but also local firms are increasingly moving into design.

So while the EDA industry may wind up owing Rambus for a good Q1, it will owe Asia for a good 2010 and beyond.

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