EDA, IP Revenue Way Up

EDA and semiconductor IP sales grew 17.5% to $3.75 billion in Q2, the highest growth in more than a decade, fueled by more complex designs and the need for advanced design and verification tools.

Demand for nearly every segment tracked in SEMI’s Electronic Design Market Data (EDMD) report was up, including services, which grew 23.2% in Q2 — the most recent statistics available in. That coupled with a 6% increase in the total number of employees, which was 54,408 in Q2 versus 49,964 in the same period in 2021. Companies across the semiconductor supply chain have been voicing concerns about talent shortages, which helps explain the growth in services, and they are hiring wherever possible, advertising many jobs as “work from home.”

Only Japan saw total EDA revenue decline by 3.5% on a four-quarter moving average, from $156.7 million in 2021 to $151.2 million in Q2 2022. EMEA showed a slight dip in PCB and MCM revenue, while IC physical design and verification was down 9.8%. In the U.S., every segment reported robust sales, and globally the situation was much the same.

“Second quarter revenue data painted a rosy picture,” said Walden Rhines, executive sponsor of the EDMD report. “All product categories and geographic regions recorded growth.”

Rhines noted privately that it’s not clear how the rest of the year will shape up, particularly with geopolitical tensions in Asia and Europe, rising gas prices, and inflation. “For the EDA industry, there is a new thorn, which is export restrictions,” he said. “Most people expect there to be low impact, because there are no specific tools for gate-all-around, but there are PDKs that can be used in the fab for those processes. The likelihood is that the foundries will not provide the PDKs to China, but you may see companies erring on the side of what they think may be covered rather than what really is covered.”

Nevertheless, EDA/IP growth was solid in Q2 2022. By category:

• CAE revenue increased 12.1% to $1.14B;
• IC physical design and verification increased 13% to $657 million;
• PCB and multi-chip modules increased 22% to $347.1 million;
• IP increased 22.6% to $1.48B, and
• Services increased 23.2% to $130.7 million.

Fig. 1: Revenues by segment and region, in $M. Source: SEMI/EDMD

By region, total revenue grew 20.2% in the Americas to $1.64 billion; 17.9% in Asia/Pacific to $1.38 billion; 6.1% in Japan to $252.3 million, and 13.7% in Europe, the Middle East, and Africa to $472 million.

Fig. 2: Four-quarter moving average shows continued strength globally through Q2. Source: SEMI/EDMD