EDA, IP Sales Up 8%

The EDA sector continues to exhibit solid growth, increasing 8% to $2.2262 billion in Q3, up from $2.0937 billion in the same period in 2016, according to the most recent stats from the ESD Alliance Market Statistics Service. The four-quarter moving average was up 11.5%, year over year.

While all of the numbers were up, two areas showed extraordinary growth. One involved Japan, which showed a 9.7% increase in Q3 2017, compared with the same period in 2016 based on a four-quarter moving average. In Japan, CAE grew 15.2% in that period, while PCB/MCM was up 16.2% and IP was up 6%. Only IC physical design and verification and services revenue showed a decrease in that country. On a quarter-by-quarter comparison, revenue increased 10.4% in Q3 to $235.3 million.

“Japan is coming back again,” said Wally Rhines, board sponsor for ESD Alliance’s MSS and president and CEO of Mentor, a Siemens Business. “Japan is growing in double digits again in CAE (computer-aided engineering), which is the largest segment. The other surprise was employment, which was up 9.9%. That’s higher than the revenue growth rate for the industry. Companies are hiring additional people with the expectation of a strong growth market.”

Employment hit 39,044 professionals in Q3, compared with 35,515 in the same period in 2016, and up 2% compared with Q2 of 2017.

At least part of this is due to growth in new markets, particularly automotive and AI. Rhines said Mentor is tracking 330 companies involved with electric vehicles, and 107 companies with autonomous vehicles. “Everyone has to load up on design tools for the next five years,” he said.

Fig. 1: Quarterly growth for EDA, semiconductor IP and services revenue, by category. Source: ESD/MSS

CAE was up 6.3% to $709 million for the quarter, while IC physical design and verification was up 2.2% to $450.9 million. PCB and multi-chip modules, meanwhile, grew 13.4% to $184 million.

Fig. 2: Total EDA, IP and services revenue by region. Source: ESDA MSS

By region, the Americas grew 4.9% to $978.4 million, while Europe, the Middle East and Africa grew 7.3%. Asia/Pacific grew 12.2% to $729.7 million.

Fig. 3: Four-quarter moving average. Source: ESDA/MSS