EDA, IP Numbers In Record Territory

EDA and semiconductor IP revenue soared to a new high, up 17% worldwide in Q1 compared to the same period in 2020, with revenue in China surging 73%, according to new data from SEMI’s Electronic System Design Alliance.

For many financial reports outside of semiconductors, strong growth numbers can be misleading because they reflect comparatively weak earnings stemming from pandemic-related slowdowns. That’s not the case for EDA and SIP revenues, which have remained strong throughout 2020, driven by new companies developing chips, a host of new applications and market segments, and a highly competitive race to build the most advanced chips and packages.

“There is no comparable number on record,” said Walden C. Rhines, executive sponsor of SEMI‘s Electronic Design Market Data Report. “This is the fastest growth we’ve ever had.”

In raw numbers, EDA and SIP revenue grew to $3.157 billion in Q1, up from $2.698 billion in Q1 2020. The four-quarter moving average surged 15%, which is the highest growth since 2011.

By market segment, CAE grew 14% to $974.1 million for the quarter, compared to the same period in 2020. IC physical design and verification was up 34.4% to $682.5 million, a reflection of both complexity and demand for better reliability in markets such as automotive and data centers. PCB and MCM revenue grew 15.3% to $289.2 million, and SIP rose 12.9% to $1.113 billion.

Still, the numbers out of China were jaw dropping. “Year on year, the revenue in China was up 73%,” Rhines said. “And if you look at EDA only, separate from IP, it was up 99%.”

The bulk of this is reported by EDA companies outside of China. “These numbers come from where U.S. companies shipped product,” Rhines said. “So the 99% is not local purchases. It comes from EDA companies around the world. If you look at design activity in China, that’s another pretty strong number. The Chinese semiconductor companies in 2020 were almost $60 billion in revenue, out of a $500 billion market.”

Revenue from China, once a relatively small fraction of EDA and IP, is rapidly closing the gap with the Americas, which is still the largest market. (See Fig. 1 below)

Other regions reported double-digit growth, as well. Revenue from the Americas grew 15% to $1.285 billion in Q1 compared to the previous year. Europe, the Middle East and Africa, grew 14%. And Asia/Pacific revenue, including China, grew 26.9% to $1.166 billion.

Japan was the only region to show a decrease. Revenue dropped 3.7%, but the four-quarter moving average was still in positive territory at 4.3%.

Investment across the industry remains robust. The EDA and IP industry employed 49,024 people in Q1, up 6.7% over the same period in 2020. Numerous industry insiders say those numbers would be even higher if the industry could find enough qualified personnel.

Fig. 1: Q1 revenue by segment and geographic region, in $millions. Source: Electronic Design Market Data