EDA, IP Growth Hits Double Digits

Strongest Q1 since 2011; server sales and AI drive memory and logic design.

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The cloud, advanced packaging and AI/machine learning pushed up EDA and IP revenue to the highest Q1 growth level since 2011. Revenue was up 10.5% year over year to $2.168 billion, compared with $1.962 billion in Q1 2016, according to just-released numbers from the Electronic System Design (ESD) Alliance.

The four-quarter moving average increased by 10.6%. The two largest regions, the Americas and Asia-Pacific both reported double-digit growth.

“Semiconductors grew at half the rate as EDA,” said Wally Rhines, board sponsor of the ESD Alliance’s Market Statistics Service and president and CEO of Mentor, a Siemens Business. “EDA is finding ways to sell more tools.”


Fig. 1: Q1 revenue by segment and region in $millions. Source: ESD Alliance MSS.

The comparison to semiconductor industry growth may be somewhat misleading these days, though. As more companies begin developing their own chips as part of the systems they make—Google, Amazon, Facebook and Apple, among others—those sales are being recorded as systems rather than broken out as chip sales. But Rhines noted it also is a sign that companies are ramping up designs across a number of markets.

“You need EDA tools ahead of revenue, and a lot of that growth is showing up in memory, logic and mixed-signal SoCs,” he said. “EDA is experiencing sales at all of the big systems companies.”

Advanced packaging also grew 15% in the quarter, as more companies begin sidestepping device scaling on a single chip and move to multi-chip solutions. Rhines said new architectures, particularly around AI and servers, are driving a sizeable portion of the design activity.

CAE, the biggest category, grew 14%, while IP—primarily macro cells and memory—grew 15%.


Fig. 2: Quarterly EDA, IP and services revenue by category, Q1 1996-Q1 2017. Source ESD MSS.

In contrast, attendance at the recent Design Automation Conference in Austin, Texas, was down. While the content quality at the show received almost universal praise, attendee numbers may indicate a shift in design activity from that location.


Fig. 3: DAC attendance (2017 numbers are preliminary). Source: Design Automation Conference

—Brian Bailey contributed to this report.