EDA And IP Numbers Up Again, But Numbers Are More Nuanced

EDA and Semiconductor IP revenue grew 10.3% in Q4 2025 to $5.466 billion, up from $4.955 billion in the same period in 2024, continuing the double-digit run for the tools and IP business that has been underway for the past few years.

CAE, the largest EDA category, rose 9.4% to $2.083 billion in Q4, versus $1.761 billion in Q4 2024. Non-reporting IP companies — a segment dominated by Arm — grew 24.7% to $1.413 billion, up from $1.134 billion in Q4 2024.

Still, the growth picture was more nuanced in Q4. “There’s a little more diversity of where it came from,” said Walden Rhines, executive sponsor of the SEMI Electronic Design Market Data Report. “One of the things that stands out is the IP business was very weak this time, especially China. If you look at the numbers on a worldwide basis reporting companies for IP grew 6.8%, but the total IP grew 18%. So non-reporting companies, principally Arm, had pretty healthy growth, while the reporting companies were sort of mediocre at 6.8%. This changes every quarter, so you have to look at the broader data to get a trend. But if you look at the last four quarters, the reporting companies have only grown 3% while the non-reporting companies have grown 25% to 26%, so there’s something going on there.”

Quarterly fluctuations can be due to everything from trade restrictions to supply shortages in such areas as memory, or war-related disruptions of critical materials. While EDA and IP are at the front end of the design-through-manufacturing flow, issues at the back end can slow the number of design starts at the front end.

The other weak area was physical design, Rhines noted. IP physical design and verification revenue was -2.6% at $797.9 million in Q4 compared to the same period in 2024.

In other categories, PCB/MCM grew 1.8% to $484.6 million, up from $476.2 million, and services revenue grew 19.6% to $233.9 million, up from $195.6 million in Q4 2024.

Table 1: Q4 revenue by segment and geographic region, in $M. Source: SEMI Electronic Design Market Data report

Table 2: Four-quarter moving average, in $M Source: SEMI EDMD report

Table 3: EDA and SIP revenue growth, Q1 1996 to Q4 2024. Source: SEMI EDMD report