Synopsys says semiconductor customers are now reining in their R&D spending and even taking aim at key design projects.
The comment is contained in its Q4 results statement. But Brad Henske, the company's chief financial officer, adds that Q4 - typically the strongest in the design automation calendar - was also "our largest orders quarter in history".
Aart de Geus, chairman and CEO says the company will now focus much more heavily on cutting expenses. He nonetheless expects Synopsys to benefit from a continuing trend from a consolidation of spending on EDA tools that is benefiting a smaller number of players.
"In last three months, the outlook for electronics has become significantly bleaker," de Geus said.
"Our customers have been forced to re-evaluate key projects. Even R&D budgets are not immune. But compared to our customers, the EDA industry has performed remarkably well.
"We are now forecasting more conservatively."
Synopsys had Q4 sales of $183.6m and net profits of $20.4m. For the full year, sales were $680.4m.
The company is continuing to move customers over to the new licensing strategy it unveiled last year and this has also had a depressive effect on headline sales. However, Henske said the company has built backlog and deferred revenue of more than $400m.
Synopsys' proportion of perpetual software licences sold fallen to an all-time low at just 14%. The remainder was made up of orders for subscription licences.
"We believe it is an abnormally low level [for perpetuals]," said Henske.
The average life of the licences sold was three-and-a-half to four years, higher than the expected average of three years going forward.
Henske claims the pruning of development budgets is not affecting tool sales alone.
"Customers are forgoing consulting. After that, it is pretty broadly based. The products at the margin are focused on time to market issues," he said.
One of the revenue victims has been the large number of simulator licences sold during the last couple of years to drive designs through verification quickly. Those bulk licence sales have fallen away as pressures on development time have eased.