Silicon IP Revenue Spikes

EDA and silicon IP revenue grew 12.8% in Q1 2025, totaling $5.098 billion compared to $4.522 billion in the same period last year, but the real story was on the IP side, surging 29.6% year-over-year to $1.577 billion. Drilling deeper into those numbers, revenue for non-reporting IP companies — predominantly Arm — jumped 34.1% YoY to $1.031 billion.

That was positive news for the IP market, and it reinforced predictions of strong growth in a multi-die era. Revenue for hard and soft IP, including chiplets and subsystems, matched the spike in multi-die assemblies and complex SoCs used in AI data centers and some of the higher-end edge devices.

But those numbers also masked some weaknesses in the EDA market. Overall, EDA revenue grew just 2.6% to $2.70 billion in the quarter, following multiple quarters of double-digit growth. Physical design and verification fell into negative territory YoY, which at $769.6 million was 9.9% less than Q1 2024.

“At the Paris AI conference (RAISE) last week, there was a lot of talk about EDA increasingly becoming an IP business with less and less needed to verify putting blocks or chiplets together,” said Walden Rhines, executive sponsor of the SEMI Electronic Design Market Data Report. “We’ve heard that before, and it’s turned out not to be true. But what is clear is that IP is strong. The problem, of course, is interfacing to it so that you get the data flowing properly in the overall design. In terms of the blocks themselves, the big companies have pretty good entrenchment in the standards that have been established. They just have to fight it out on the new standards that come along. The portfolios at EDA companies and Arm are impressive. Everything you need to put together the design is there.”

Among the other categories tracked by SEMI, comparing Q1 2025 revenue to Q1 2024:

• Revenue for computer-aided engineering revenue, the largest EDA category, increased 7.8% to $1.748 billion;
• IC physical and design dropped 9.9% to $693.5 million;
• PCB and MCM revenue increased 5.5% to $399.8 million, and
• Services revenue grew 22.3% to $212.6 million.

Fig. 1: Q1 revenue by sector. Source: SEMI Electronic Design Market Data Report

On a four-quarter moving basis, total growth was up 12.6%, but EDA and IP revenue in Asia/Pacific, which is largely China, was just 8.2%, compared to 17.0% in the Americas. EMEA grew 11.4% during that period. See fig. 2 below.

Fig. 2: Four-quarter moving average, showing continued growth in tools and services, despite some regional slowdowns. Source: SEMI EDMD Report

And despite all the chatter about AI replacing engineers, so far the employment numbers in these sectors remain strong. Head count increased 4.5% in Q1 2025 for a total of 64,403 professionals, compared to 61,653 in Q1 2024.