They're celebrating over at the EDA Consortium, where that organization's Market Statistics Service (MSS) has showed the first year-to-year EDA revenue growth since the fourth quarter of 2001. A closer look, however, reveals that all of that growth came from Japan or "rest of world," suggesting that electronic design is expanding in Asia but not in the United States or Europe.

According to the MSS, worldwide EDA revenue for the second quarter was $946 million, an 8 percent rise over the year-ago quarter. Gains were reported in nearly every tool category, including pc-board layout, IC physical design and verification, CAE and semiconductor intellectual property (IP).

But the gain is strictly geographical. Most of it came from Japan, where year-to-year EDA revenue growth surged by 61 percent. Japan now accounts for 19 percent of global EDA revenue. "Rest of world," including places like China, Taiwan, South Korea and India, reported a 27 percent year-to-year jump in revenue growth.

But North America was flat-from $499 million in the second quarter of 2002 to $501 million in that period this year. Europe saw an 11 percent year-to-year revenue fall.

Meanwhile, some of the sector's second-quarter revenue increase came from a surge in silicon IP, which should not be included in the EDA statistics. It's misleading anyway, because EDAC included some new companies in this year's total.

Do the latest quarterly results reflect a geographical anomaly or a new trend? Just one year ago, Japan had a difficult quarter, declining to 13 percent of the world total. So maybe Japan is playing catch-up.

Perhaps most interesting is the steady growth in "rest of world," which accounts for 10 percent of global EDA revenue. This is the area to which chip design and verification is most likely to be outsourced.

At last month's Custom Integrated Circuits Conference, panelists said chip design outsourcing is inevitable, and what ultimately will remain in the U.S. is architectural design or highly specialized niches, like analog or RF. The EDAC MSS numbers may provide one indication the outsourcing trend has begun.

The return to worldwide EDA revenue growth is good. But let's save some of the champagne for a return to sustained growth globally, including North America.

Richard Goering is managing editor of Design Automation for EE Times.

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