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EDA/IP  

Group announces weakness in EDA industry

Posted: 07 Jul 2008     Print Version  Bookmark and Share

Keywords:electronic design automation  industry revenue  IC< Computer Aided Engineering 

The EDA Consortium Market Statistics Service announced that the electronic design automation industry revenue for Q1 2008 declined 1.2 per cent to Rs.5,405.65 crore ($1350.7 million) compared to Rs.5,470.08 crore ($1366.8 million) in Q1 2007.

The four-quarter average growth rate, which compares the most recent four quarters to the same four quarters in the prior year, was up 5.9 per cent.

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

Main areas of strength were in leading-edge technologies such as electronic system level design, design for manufacturing, 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 loosing ground, is growing at only a very sluggish pace.

Revenue by Product Category

EDA's largest category, Computer Aided Engineering (CAE), generated revenue of Rs.2,142.73 crore ($535.4 million) in Q1 2008, representing a 2.7 per cent increase over the same period in 2007. The four quarter moving average CAE growth rate was 10.6 per cent. Electronic System Level (ESL) tool sales were particularly strong in this sector.

For IC Physical Design & Verification, the next largest category, revenue decreased to Rs.1,300.68 crore ($325 million) in Q1 2008, a 9.1 per cent decrease compared to Q1 2007. Place and Route and Custom Design tools recorded noticeably weak sales figures, while design for manufacturing, design for test, IC layout verification, IC/ASIC power analysis, and RF/ mixed-signal design sectors all showed growth. The four quarter moving average growth rate increased 6.7 per cent for those sectors.

Printed Circuit Board and Multi-Chip Module (PCB & MCM) revenue decreased 1.4 per cent over Q1 2007 to Rs.524.68 crore ($131.1 million). The four quarter moving average growth rate for PCB & MCM showed a 4.7 per cent decrease.

Semiconductor Intellectual Property (SIP) revenue totalled Rs.1,086.17 crore ($271.4 million) in Q1 2008, a 1.7 per cent increase over Q1 2007. The four quarter moving average growth rate for SIP was 1.2 per cent. 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 had this revenue category been omitted from the four-quarter moving average calculations, revenue growth would actually be closer to 7%, a much more reassuring number. For the quarter-to-quarter comparison, though, growth would have been lower than reported.

Services revenue was Rs.351.38 crore ($87.8 million) in Q1 2008, down 0.8 per cent from Q1 2007. The four quarter moving average growth rate for services was 6.0 per cent.

Revenue by Consuming Region

North America, EDA's largest region, purchased Rs.2,261.59 crore ($565.1 million) of EDA products and services in Q1 2008, which represents an 8.2 per cent decrease compared to Q1 2007. The four quarter moving average growth rate was down slightly by 0.8 per cent for North America.

Western Europe revenue was up 13.5 per cent in Q1 2008 compared to Q1 2007, with revenues of Rs.1,075.37 crore ($268.7 million). The four quarter moving average growth for Western Europe was 11.2 per cent.

Q1 2008 revenue from Japan increased 2.4 per cent to Rs.1,309.09 crore ($327.1 million) compared to Q1 2007. The four quarter moving average increase was 7.9 per cent for Japan.

Rest-of-World (ROW) decreased to Rs.759.60 crore ($189.8 million) in Q1 2008, a 2.5 per cent decrease compared to the same quarter in 2007. The four quarter moving average growth was positive at 19.9 per cent. It is impossible to extract figures for China and India from the report, because, according to Dr. Rhines, 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.

- Gabe Moretti
Design News





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