The EDA Consortium has released industrywide sales numbers for the first quarter of 2013, and there is plenty to be excited about.
Let's start with the headline numbers and then move into some specific areas. EDA industry revenue increased 8.1 percent from the first quarter of last year to $1.67 billion. As expected, revenue fell from the fourth quarter, but the four-quarter moving average increased 7 percent. The total revenue for the most recent four quarters was $6.66 billion.
Breaking the figures out by product area shows that first-quarter revenue from design and verification (which the consortium calls CAE) rose 4.7 percent from a year earlier to $599.1 million; the four-quarter moving average increased 9 percent. IC physical design and verification revenue decreased 3.1 percent to $340.1 million; the four-quarter moving average decreased 1 percent. Printed circuit board and multi-chip module revenue rose 6.7 percent to $157.2 million; the four-quarter moving average increased 8 percent. Semiconductor intellectual property revenue rose 20.2 percent to $470.3 million; the four-quarter moving average increased 11.2 percent. Finally, services revenue rose 23.8 percent to $101.9 million; the four-quarter moving average increased 3.5 percent.
Revenue per EDA segment during the first quarter.
(Source: EDA Consortium)
Let's examine that last area first. Services growth usually indicates increased demand among semiconductor companies for design work than they can fulfill using their own employees. This is a leading indicator that the semiconductor market is improving and that, in a slightly longer timeframe, EDA will continue to improve, because extra employees will eventually need more tools.
Over the past decade, the annual market for EDA has grown from $4.2 billion to $6.7 billion. This beats the US GDP growth rate over the same period, so it raises a question: Why does EDA have problems attracting investment dollars? If you dig into the numbers a little more, you find that almost all the growth over the past decade has come from IP. Before long, IP will probably become the largest category.
EDA, SIP, and services revenue by quarter in millions of dollars.
(Source: EDA Consortium)
Printed circuit boards (helped by packaging) were a standout area for the quarter. This very mature part of the industry is an unusual area to show such growth. It was also a good quarter for AMS, full custom design, DFT, DRC, and formal. Wally Rhines, board sponsor for the EDA Consortium market statistics service and chairman and CEO of Mentor Graphics, told us that most growth happens within the first 10 years of a new technology area; after that, it tends to stabilize and become automated, and growth slows. In some cases, revenue will then drop. For example, the IC place and route market was about $600 million in 2003, but has now dropped to $530 million.
The biggest negative in the report continues to be Japan. "The numbers indicate that there is no growth or a very modest decline of 1 percent," Rhines said. "The restructuring of Japan is still going on at a rapid pace. There are a lot of companies moving to a fab-lite model. Change is still happening, and it will take a while for it to sort itself out."