EDA, IP Grow 16.3%

EDA and IP revenue rebounded in Q1, with all geographies reporting increases, according to the ESD Alliance Market Statistics Service.

Total revenue increased to 16.3% to $2.606 billion, up from $2.241 billion in the same period in 2018. The global numbers do not reflect the impact of a trade war between the United States and China, which occurred in Q2, but they do point to a significant recovery from Q4 2018, when DRAM sales softened and the entire chip industry faced a slowdown.

“What isn’t in the report is that license and maintenance revenue was up 18.3%, which is the largest growth ever in a quarter,” said Wally Rhines, CEO emeritus at Mentor, a Siemens Business, and member of the ESD Alliance Governing Council. “China’s numbers were up 24.4%. This is very broad. Everybody except Japan is up.”

According to the statistics, India grew 35.2%, Korea grew 124.6%. The only down area was services.

Fig. 1: EDA/IP growth, by region. Source: ESD Alliance/Market Statistics Service

“If you look at some of the specifics, ESL grew 18%, or $77 million in one quarter,” said Rhines. “Analog/mixed signal grew 26%, and DFT grew 42%. Physical implementation was down slightly, but yield enhancement was strong. And IP for reporting companies increased 23%. Almost all of the reporting companies noted a big influx of new companies joining IP and circuit design. Those include automotive companies, as well as companies like Google, Facebook and Amazon, which have been substantial buyers of EDA tools and IP.”

It’s difficult to judge the industry by a single quarter. Using a four-quarter moving average, which is a better measure of industry health, worldwide growth rose 6.1% to $2.463 billion in the first quarter, up from $2.322 billion in Q1 2018. Growth in the Americas increased 4.3%, while Asia increased 8.4%.

Fig. 2: Four-quarter moving average. Source: ESD Alliance/Market Statistics Service