EDA, IP Revenues Soar

EDA and IP revenues increased 15.4% to $3.032 billion in Q4 2020, according to a just-released report, with huge increases reported in China and India, and a solid double-digit increase in the Americas.

EDA/IP revenue from China increased 66.4% in Q4 EDA/IP compared with the same period in 2019, and for the 2020 calendar year it was up 52.3%. India’s spending was up 32% for the quarter. And revenue from the whole Asia/Pacific region was up 23.4% to $1.04 billion in the quarter, compared to the same period in 2019, according to the SEMI ESD Alliance. Only South Korea was down slightly.

“These numbers are tremendously strong,” said Walden Rhines, executive sponsor of SEMI’s Electronic Design Market Data report, pointing in particular to the growth in China. “The Chinese government has been subsidizing semiconductor infrastructure and encouraging a lot of capacity, and they have been stocking up for fear of further embargoes. But India also was very strong.”

Japan’s EDA/IP revenue also increased 8% to $228 million in Q4, a sign of continued strength in consumer and automotive design, while Europe’s increased 2.7% to $457.2 million.

Fig. 1: Q4 Revenue by segment and region. Source: SEMI ESD Alliance/EDMD

In addition, hiring continued at a brisk pace. Industry executives have been vocal about an ongoing shortage of talent, and those warnings are supported by the jobs numbers. A record 48,478 people were employed in the electronic system design industry, up 6.7% over the same period in 2019, and up 3% from the fourth quarter of 2020. On a related note, service revenue increased 2.2% to $91.6 million, after years of flat or declining revenues, an indication that companies are seeking additional help.

“The number of people doing designs is increasing,” said Rhines. “We are entering a period defined by Makimoto’s Wave, where there is a growing number of custom designs. There is more semiconductor content in equipment, which helps EDA, and more and more customization. So the unit volume per design declines, which is why we’re seeing new waves of customization. That’s driving FPGAs, chiplets, and other modes of customization.”

Makimoto’s Wave is based on an observation made by former Sony CTO Tsugio Makimoto in the early 1990s, which states that electronics cycled between custom and standardized solutions roughly every 10 years.

By market segment, design for test grew 68%, a reflection of the demand for greater reliability as electronic systems begin to replace mechanical components in automotive and robotics, and as more chips are used in safety- and mission-critical applications. Even in smart phones, chips are expected to last a minimum of four years, compared to a minimum of two years just several years ago. And in automotive applications, German carmakers are demanding chips last 18 years.

Connecting design and IC manufacturing more tightly, and shifting much of the planning left in the flow, is partly a reflection of this emphasis on reliability, and partly a reflection of the need to improve yield of increasingly complex, heterogeneous designs. This, in turn, is evident in the numbers. Resolution enhancement grew 151%, while IC physical design and verification was up 36.6%.

Analog/mixed signal design and RF grew 22% in the quarter, driven largely by sensors and 5G, and it was up 10% for all of 2020.

Compared with Q4 2019, CAE revenue increased 9.4% to $956.9 million; PCB and multi-chip module revenue dropped slightly to $292.9 million, a 0.8% decrease; and SIP revenue increased 16.9% to $1.053 billion.

Fig. 2: Quarterly EDA/SIP and services revenue by region, Q1 1996 to Q4 2020. Source: SEMI ESD Alliance/EDMD