EDA Industry Update – March 2010 What did the Last Quarter Bring?
by Dr. Russ Henke
Henke Associates
Attention Loyal Readers of the Electronics IP Industry & the EDA Industry Commentaries presented here quarterly since 2003:
Don’t worry – they aren’t going away! They will each continue to appear quarterly, but the latest EDA and IP information will be combined into one quarterly document that will be published as part of the EDA WEEKLY collection. The first edition in this new format will appear in late December 2010 or early January 2011, cleverly entitled, "EDA & IP Industry Commentary for Q3 2010." Subsequent EDA and IP information will likewise appear each subsequent quarter in this fashion.
Content-continuity with previously-posted IP and EDA data will be fully preserved, as follows:
- The last stand-alone Electronics IP Industry Commentary for August 2010 covered the G5 IP vendor revenue & earnings results, etc., for Q2 2010.
- The last stand-alone EDA Industry Commentary for July 2010 covered the G5 EDA vendor revenue & earnings for nominal Q1 2010.
- Subsequently, the G5 EDA vendor revenue & earnings for nominal Q2 2010 were contained in the EDA WEEKLY issue of September 13, 2010, entitled, "Whither EDA?"
- All previous Commentaries and EDA WEEKLIES, including those referred to above, are immediately available to readers by clicking on the “Archived Commentaries” or “Archived Weeklies” URL’s that appear in their respective identity boxes on the main front page of EDACafe.com.
As part of continuing EDA industry consolidation, two previously-selected EDA vendors, namely Verisity and Nassda, had been acquired by others and hence were dropped from the quarterly EDA Commentaries. More recently, EDA vendor Synplicity was acquired by EDA vendor Synopsys, and EDA vendor Ansoft was acquired by MCAE vendor ANSYS. Consequently, both Synplicity and Ansoft no longer independently appear in these EDA Industry reports.
This March 2010 EDA Industry Commentary covers (for the nominal Fourth Quarter of 2009) the performances of the remaining group of five (G5) EDA vendors: Altium, Cadence, Magma, Mentor Graphics, and Synopsys. The timing of the publication of these quarterly commentaries is usually governed by the official financial news release of the last G5 vendor reporting; this time Mentor Graphics was the last to report.
EDA News Highlights are followed by the revenue & earnings performances of the selected group of EDA players for nominal Q4 2009, and then EDA vendor by vendor details. When available, these details include individual EDA vendor forecasts for nominal Q1 2010. EDA Vendor stock prices are discussed. Finally, some EDA Consortium stats are included for Q3 2009.
Recent EDA Industry News Highlights:
On February 26, 2010 the US Bureau of Economic Analysis said that the real Gross Domestic Product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 5.9% in the fourth quarter of 2009, according to the "second" estimate released by the Bureau. The first (preliminary) estimate that appeared on January 29, 2010 of Q4 GDP was +5.7%. The Q4 GDP was the fastest growth pace in more than six years. In the third quarter of 2009, real GDP increased 2.2%.
On March.5, 2010 the US Labor Department reported that US employers cut a smaller than expected 36,000 jobs in February 2010, leaving the overall US unemployment rate steady at 9.7%. Moreover, job losses for December and January combined were revised to show 35,000 fewer jobs lost than previously reported. The labor market is gradually improving and the pace of layoffs has slowed markedly from early last year when the US economy was losing 750,000 jobs on average a month. Manufacturing actually added 1,000 jobs in February 2010. Also, temporary hiring added 48,000, a sign that more permanent hiring lies ahead.
Closer to the heart of the EDA Industry, on March 1, 2010 the Semiconductor Industry Association (SIA) reported that worldwide semiconductor sales in January 2010 were $22.5 billion, an increase of 0.3% from December 2009 sales of $22.4 billion. Boding well for the overall EDA industry, the SIA said that semiconductor sales in January 2010 increased by 47.2% from January 2009, when sales were only $15.3 billion. (All monthly SIA sales numbers represent a three-month moving average).
“Worldwide semiconductor sales in January increased significantly compared to one year ago, reflecting today's improving business environment for the industry,” said SIA President George Scalise. “January and February of 2009 were the low point of the industry downturn as the semiconductor industry and electronics manufacturers quickly responded to the global economic recession. We are currently seeing strength across a range of demand drivers for semiconductors, including personal computers, cell phones, automobiles, and industrial applications. If the current trends continue, there is upside potential for 2010 growth above our November forecast of $242.1 billion, but a growing global economy driven by consumer purchasing will be key to sustaining these trends,” Scalise concluded.
For the entire SIA press release, go to:
At the EMBEDDED WORLD 2010 Show in Nuremberg, Germany on March 2, 2010, Altium Limited announced a technology partnership with Atmel® to co-develop an integrated solution combining Atmel's Qtouch® Studio, a touch sensor configuration tool, and Altium's electronics design solution Altium Designer. Brokered and negotiated in Europe, the partnership is worldwide in scope. "We are excited to be creating the industry's first native touch sensor development solution," said Martin Harris, Vice President EMEA, Altium. "With Atmel and Altium, engineers can reduce design time by up to 90%. These productivity improvements will help companies compete and focus on developing product differentiation, instead of wasting time on inefficient design processes. This extension to the world of touch sensitive product development is a natural one because of Altium's unified approach to electronics design, where the entire design process is managed using a single data model and a single application. And Altium's electronics design data management features now also embrace the touch sensitive design aspects as well."
On March 01, 2010, Cadence announced that Chipsbank Microelectronics Co., Ltd., a fabless IC design company based in Shenzhen, China, had adopted the Cadence® Incisive® Xtreme® III system to accelerate the RTL design process with a verification flow for its next-generation digital consumer and networking chips.
Chipsbank is a provider of chips targeting applications areas such as digital audio/video processing, mobile storage, network communications and consumer electronics. The deployment of the Incisive Xtreme III system, as well as Cadence Incisive Enterprise Simulator, enabled Chipsbank engineers to accelerate their full-chip SoC verification at the register-transfer level (RTL) up to 500 times.
“We saw significant performance improvement after adopting Cadence Xtreme III-it speeds up the verification time over 500 times,” said Henry Zhang, CEO of Chipsbank. “We are also impressed with its usability and debugging capability, which help greatly shorten the verification cycle of our chips for the highly demanding consumer market. We are looking forward to collaborating with Cadence on future projects, including 65-nanometer implementation and design services.”
On March 10, 2010 Magma® Design Automation Inc. unveiled Tekton™, a new timing analysis platform that is said to offer higher capacity and faster runtimes than traditional tools, without sacrificing accuracy. Tekton is said to be able to run multi-scenario analyses on relatively low-cost hardware without requiring a large number of expensive servers and software licenses.
"The complexity of timing sign-off has reached crisis proportions, forcing design teams to re-evaluate resource planning, design architectures and final sign-off solutions," said Premal Buch, general manager of Magma's Design Implementation Business Unit. "Capacity and runtime limitations of current STA tools often force teams to sacrifice accuracy to meet tight design schedules, or they must invest in expensive servers and additional software licenses in an attempt to achieve reasonable turnaround times. By enabling STA in just minutes for the industry's biggest chips - on a single machine - Tekton is truly the next-generation timing analysis platform."
On February 24, 2010 at SEMI-THERM in Santa Clara, CA Mentor Graphics Corporation announced the FloTHERM® IC productivity tool targeting the semiconductor industry for thermal characterization and design. Addressing increased complexity, chip density, and high-speed requirements for today's silicon designs, the FloTHERM IC solution is deployed as a web-based platform that is said to deliver automation to the design tasks associated with thermal characterization and validation.
Mentor says that a typical semiconductor thermal team spends approximately 60% of its time on standard package thermal characterization and design, and the remaining time for customer-specific characterizations. The FloTHERM IC tool reduces the time spent on thermal characterization and design by providing an automated process that includes pre-verified thermal models to reduce the risk of modeling errors. The tool can also achieve reductions of up to 25% in the time usually needed for customer-specific characterizations.
The FloTHERM IC tool is based on proven technologies: FloTHERM computational fluid dynamics (CFD) software, used to simulate airflow, temperature and heat transfer in electronic systems, and the FloTHERM PACK Smart Parts modeling tool.
"Within our organization, our teams all need access to thermal information at different stages of the design and manufacturing cycle. My group has an extensive background in using FloTHERM for electronics cooling applications; however, not everyone needs access to the full power of FloTHERM. That is why FloTHERM IC can fulfill an important role in the design process," stated Dr. Claudio Maria Villa, Thermal Design, Corporate Packaging and Automation Group, STMicroelectronics.
“We recognize the importance of thermal analysis for today's semiconductor packaging market, and we believe our FloTHERM IC solution will be a competitive advantage for our customers,” stated Dr. Erich Buergel, general manager of Mentor Graphics Mechanical Analysis Division.
On February 02, 2010 Synopsys, Inc. announced it had acquired VaST Systems Technology Corporation to extend its virtual prototyping solutions into the automotive and consumer application space. The acquisition added a set of processor sub-system models frequently found in automotive and consumer applications to Synopsys' virtual prototyping portfolio. Processor sub-system models allow developers to accelerate the virtualization of electronic systems and to start software development nine to 12 months prior to the availability of silicon.
"In order to meet the stringent development requirements associated with today's growing electronics and software content in automotive and consumer products, developers are virtualizing their electronic sub-systems to start software development earlier, improve their productivity and deliver better-tested, higher quality products," said Joachim Kunkel, senior vice president and general manager of the solutions group at Synopsys. "By adding VaST's complementary virtual prototyping solutions to Synopsys' existing virtual and rapid prototyping product portfolio, we can deliver a robust system prototyping solution to automotive and consumer application developers."
Virtualization is a key technology to improve software development productivity and system verification. Virtual prototypes enable pre-silicon software development and complement traditional hardware/software verification approaches. They are said to represent one of the fastest-growing opportunities in the system-level design and verification market segment.
The terms of the deal, which closed February 1, are not being disclosed. Synopsys does not expect the transaction to have a material impact on 2010 revenue or earnings per share (EPS).
Less than a week later, on February 08, 2010 Synopsys, Inc. also announced it had signed a definitive agreement to acquire CoWare, Inc., a supplier of software and services for electronic systems design. When completed, the acquisition will expand Synopsys' portfolio of system-level design and verification products used in wireless, consumer and automotive design.
The transaction is subject to customary closing conditions, including HSR (Hart-Scott-Rodino) review, and is expected to close soon. As with VaST, the terms of the CoWare transaction are not being disclosed.
The industry buzz following the two announcements by Synopsys above, prompted Dr. Lauro Rizzatti, GM of EVE-USA, to speak out on February 22, 2010:
“The news dominating the EDA communications channels of late is Synopsys' recent acquisition spree of several small, well-regarded emerging companies with innovative technology. I'm not ready to debate whether these moves signal the demise of the virtual platform market segment. Instead, my guest blog is on fostering innovation.
Synopsys corporate strategy confirms my theory and one held by others as well: Small companies are much better able to manage and promote innovation than the larger, more established players.
Most often, it's a startup or emerging company that develops groundbreaking new technology and that's due to any number of reasons. Startups and small companies can offer an entrepreneurial environment conducive for innovative and creative thinking, and frequently encourage their employees to experiment. These firms have a luxury not afforded by the large, more established companies -- they are not restricted by a hierarchy and a structure that can stifle creativity.
Small and emerging companies are better able to focus an R&D team on a technical challenge, enabling them to take a fresh, even radical, approach. They can be more aggressive in identifying and responding to market trends and industry needs, especially if the market capitalization is not large enough for an established player to justify an investment.
Two great examples of the entrepreneurial spirit of emerging verification companies are EVE and Real Intent. With more than 70% of the development cycle of a system-on-chip (SoC) design being consumed by verification, these two companies are leading the way with innovative products.
I'm quite proud of EVE, an innovative emerging company formed in 2000 that's turned the emulation market inside out. Our goal, that we believe to be within reach, is to become the leader in hardware-assisted verification and embedded software validation for any-sized design, regardless of complexity and topology in any industry segment. Over the years, EVE has unveiled several generations of emulation tools based on standard FPGAs that offer design teams a high return on investment.
And, Real Intent, the formal verification leader that pioneered intent driven verification, underscores entrepreneurism at its best. No one believed that formal verification could be commercialized after one company's failure in the 1990s. Instead, Real Intent, with its automatic formal verification software, has continued to defy expectations since 1999.
Of course, large companies have positive characteristics as well, just not entrepreneurial or especially innovative. They often have vast resources for marketing programs and their sales channels are much better developed and coordinated then a startup's. These same large companies carefully track the progress of a startup and can be counted on to acquire them, when the timing's right. This is all part of the EDA ecosystem that's worked for many years.
Startup, emerging company, large established players. In an ecosystem such as EDA, we need both large suppliers and innovative small companies to keep driving and encouraging technological advances.”
How did the G5 EDA Vendors fair during the 4th Quarter of 2009?
With respect to the combined G5 revenue total, Table 1 reveals that the covered vendors delivered a stronger nominal Q4 2009 than they did in the just previous third quarter of 2009 by some 5.4 % to reach $829 million. But the G5 still fell short of their year-over-year Q4 2008 combined total of $854 million by about 3%, as each of the BIG 3 delievered Q4 2009 revenue results that were off a few percentage points from the corresponding quarter in 2008. Altium was down and Magma was up, but both contributions were too small to change the G5's combined outcome.
Table 2 reveals that the nominal Q4 2009 total earnings of the G4 vendors reporting quarterly earnings turned around their combined results compared to Q3 2009 by some $189 million, as both Mentor Graphics and Synopsys each delivered generous sequential net income improvements to get deep into back ink. Cadence managed to report virtually breakeven in Q4 2009 and Magma went negative again. Of course the combined G4 earnings in Q4 2009 took a huge positive leap of $1.8 billion year-over-year, almost solely due to Cadence's monumental positive difference of $1.636 billion in year-over-year Q4 profitability, although the other three entities also contributed.
Company by Company Q4 2009 details:
On February 22, 2010 Altium Limited (ASX:ALU) released its audited statement for the half-year ending December 31, 2009. Total revenue was of $21.7 million for the half year, a decrease of 19% compared the half year ending December 31, 2008. Nevertheless, the vendor improved its cash balance to $4.1 million as of December 31, 2009, an increase of 17% from the level of $3.5 million as of June 30, 2009.
On a region by region basis, Altium's half year revenue measured in US$ was off 24% year-over-year in the Americas, off 19% measured in euros in Europe, off 17% measured in US$ in Asia Pacific, and off 49% in US$ in Greater China.
"As we mentioned in our update in January 2010, the first half (July - December 2009) of this financial year reflected tough economic conditions in electronics design markets around the world," said CEO Nick Martin. "Our assumptions that the next six months will continue to be difficult remain unaltered. However, we have seen a marked increase in new customers moving to Altium in the US and Europe. We reported in January that 275 companies had bought Altium solutions for the first time in the US in the last (October - December) quarter. That number is matched in Europe, and both are trends that continued through calendar year 2009.
"Looking ahead, we are on track to release the next major version of our software to the market late in this third quarter, and our research and development efforts now focus on exciting new developments in the area of electronics design data management. This will create new opportunities for us at the enterprise level in organizations later this calendar year,” Martin concluded.
EDA Commentary readers are encouraged to sift through the detailed profile on happenings at Altium Limited posted in EDA Weekly on EDAcafe.com from March 01, 2010 to March 15, 2010, available permanently at the following URL:
On February 03, 2010 Cadence Design Systems, Inc. (NASDAQ: CDNS) announced results for its fourth quarter and year, the periods ending on December 31, 2009.
Cadence reported fourth quarter 2009 revenue of $220 million, down 3% compared to revenue of $227 million reported for the same period in 2008, and up 2% compared to revenue of $216 million in Q3 2009. The $220 million for Q4 2009 was exactly in the middle of the range of revenue guidance provided last quarter.
The real news this quarter was the improvement in earnings for Cadence compared to the disaster in Q4 2008. On a GAAP basis, Cadence recognized net income of $2 million, or $0.01 per share on a diluted basis, in the fourth quarter of 2009, compared to a net loss of…gasp…$1.63 billion, or $(6.55) per share on a diluted basis in the same period in 2008. In sequential Q3 2009, Cadence lost $14 million. Fourth quarter 2009 GAAP net loss per diluted share was expected to be in the range of $(0.08) to $(0.06), according to the guidance given three months ago.
Revenue for entire year 2009 totaled $853 million, compared to revenue of $1.04 billion in calendar year 2008. The net loss for 2009 was $150 million, or $(0.58) per share on a diluted basis, compared to an unprecedented net loss of $1.86 billion, or $(7.30) per share on a diluted basis for 2008.
The $853 billion for all of 2009 was near the top end of the range given as guidance 3 months ago. On a GAAP basis, net loss per diluted share for fiscal 2009 was expected to be in the range of $(0.66) to $(0.64) in guidance given just last quarter.
The GAAP net loss for the fourth quarter and fiscal year 2008 included a non-cash “impairment charge” of $1.36 billion, related to Cadence's goodwill, intangible assets, and fixed assets. The impairment charge, which was driven by adverse economic conditions and a decline in Cadence's market capitalization, was said to have had no effect on Cadence's cash flows.
"In 2009, we positioned Cadence for future growth. We improved our customer engagement, strengthened our foundation technology, and reduced our cost structure. We've identified new opportunities for growth, and renewed Cadence's culture of innovation and accountability," said Lip-Bu Tan, president and chief executive officer. "Our primary operational focus in the year was to enhance the level of research and development engagement at key accounts and open new business opportunities for the company."
"In 2009, we significantly improved operating efficiency while strategically redeploying resources," said Kevin S. Palatnik, senior vice president and chief financial officer, adding, "I believe that with continued strong focus on execution, we will expand our position with customers, grow the top line and improve profitability over time."
Business Outlook:
For the first quarter of 2010, the company expects total revenue in the range of $210 million to $220 million. First quarter GAAP net loss per diluted share is expected to be in the range of $(0.10) to $(0.08).
For the full year 2010, the company expects total revenue in the range of $865 million to $900 million. On a GAAP basis, net loss per diluted share for fiscal 2010 is expected to be in the range of $(0.29) to $(0.19).
On February 25, 2010 Magma® Design Automation Inc. (NASDAQ:LAVA) reported revenue of $31.0 million for its fiscal 2010 third quarter ended January 31, 2010, above the company's guidance range of $29.5 million to $30.0 million. Revenue increased 1% from the $30.7 million reported for the year-ago quarter ended February 01, 2009, and revenue was up some 4.4% from the just prior sequential quarter.
Retreating from a small profit in the just preceding quarter, Magma reported a net loss of $(2.6) million, or $(0.05) per share (basic and diluted), for the quarter ended January 31, 2010, compared to a net loss of $(77.8) million, or $(1.72) per share (basic and diluted), for the year-ago quarter.
In the third quarter of fiscal 2010, Magma generated cash flow from operations of approximately $4.0 million.
"Magma performed very well in the (fiscal) third quarter, continuing a string of quarters where we beat our revenue guidance and generated cash," said Rajeev Madhavan, Magma chairman and CEO. "Our products in physical verification, circuit simulation and analog/mixed-signal design are showing good momentum that we believe position us for significant bookings growth."
Business Outlook:
For Magma's fiscal 2010 fourth quarter, ending May 2, 2010, the company expects total revenue in the range of $32.5 million to $33.0 million. GAAP net loss per share is expected to be in the range of $(0.09) to $(0.08). For Magma's fiscal year 2010, ending May 2, 2010, the company expects total revenue in the range of $122.0 million to $122.5 million, compared to the previous guidance range of $120.0 million to $125.0 million.
On March 4, 2010 Mentor Graphics Corporation (NASDAQ:MENT) announced results for its fiscal fourth quarter and full year ending January 31, 2010.
For the fiscal fourth quarter, the company reported revenues of $237.1 million, up over 25% compared to the just prior quarter, but down 2.4% from the year-over-year quarter ended January 31, 2009. (Three months ago, the company expected to recognize about $230 million in fourth quarter revenue as guidance).
GAAP earnings per share of $.39 in this last quarter compared favorably to $0.33 per share on a diluted basis in last year's Q4. (Three months ago, the company expected to achieve GAAP EPS of only $0.33 in the fourth quarter as guidance).
For the full fiscal 2010 year, the company reported revenues of $802.7 million, up 2% from the $789 million in fiscal 2009, and a GAAP loss per share this year of $.23, down from a loss per share of $.99 the prior year.
During the quarter, the company extended its Catapult® C Synthesis product to support the SystemC design language, allowing designers a richer set of choices in doing system level design. The company also launched its Tessent™ YieldInsight™ product, which allows customers to use integrated circuit production fault data to understand where those faults are physically located on the chip, thus allowing them to be corrected.
EDA Commentary readers are encouraged to sift through the detailed profile on happenings at the Mentor Graphics Mechanical Analysis Division posted in EDA Weekly on EDAcafe.com from December 07, 2009 to December 22, 2009, and available permanently at the following URL:
“The electronics industry recovery seems to be well underway, and we are increasingly optimistic about the business environment in the coming year,” said Dr. Walden C. Rhines, CEO and chairman of Mentor Graphics. “The company's focus on its product segments with number one market share, as well as investments in new product categories, continue to show strong results, as the average dollar value of renewals in the top ten contracts in the fiscal fourth quarter grew 25% over the prior contract values.”
“Our strong emphasis on cost controls throughout fiscal 2010 has positioned us well,” said Gregory K. Hinckley, president of Mentor Graphics. “An improving currency environment, good performance in our new and emerging product segment and recovery in our base business all point to a better year in fiscal 2011.”
Business Outlook:
For the fiscal first quarter ending April 30, 2010, the company expects revenues of approximately $180 million and break-even to a loss per share of $.05, on both a GAAP and non-GAAP basis.
For the full year fiscal 2011, ending January 31, 2011, the company expects revenues to grow around 5%.
On February 17, 2010 Synopsys, Inc. (NASDAQ:SNPS) reported results for the quarter ending January 31, 2010. Synopsys achieved revenue of $330.2 million in that quarter, down nearly 3% compared to $339.8 million for the corresponding quarter a year ago. (The $330.2 million in revenue was within the revenue range given as guidance 3 months ago).
On a GAAP basis, net income for the quarter ending January 31, 2010 was $132.8 million, or $0.88 per share, compared to $52.4 million, or $0.37 per share, for the corresponding quarter ending January 31, 2009.
By the by, net income for the just closed quarter includes a one-time $91.6 million, or $0.61 per share, tax benefit associated with the IRS settlement for fiscal years 2002-2004, announced on January 12, 2010. (This possible tax benefit was mentioned in guidance 3 months ago).
"Synopsys started the year with solid momentum," said Aart de Geus, chairman and CEO of Synopsys. "We met or exceeded our financial targets, and made a number of strategic moves that we believe will increase our total available market substantially in the long term."
Business Outlook:
Synopsys provided financial targets for its next quarter ending April 30, 2010 and for the full fiscal year ending October 31, 2010. These targets do not include future acquisition-related expenses that may be incurred during 2010.
Next Quarter Targets :
- Revenue: $331 million to $339 million
- GAAP expenses: $278 million to $295 million
- GAAP earnings per share: $0.22 to $0.28
- Revenue from backlog: greater than 90%
- Revenue: approximately $1.33 billion to $1.35 billion
- GAAP earnings per share: $1.55 to $1.74
- Cash flow from operations: $200 million - $220 million
EDA Vendor Stock Performances
Table 3 below reveals that the combined total of the G4 stocks fell over 4% in value during calendar Q4 2009, while both the NASDAQ and the DOW gained value of about 7%. Over the course of calendar 2009 year, however, the combined G4 stock total outpaced the NASDAQ'S remarkable growth, but barely (45.1% to 43.9%).
Only MAGMA grew its per share value over the course of calendar Q4 2009, and MAGMA more than doubled its per share price over the 2009 calendar year (+126.5%). CADENCE and MENTOR both outpaced the NASDAQ during calendar 2009. SYNOPSYS grew nicely from a much larger base to begin the year (+20.3%).
Table 4 provides a snapshot of the behavior of the G4 stock prices since the end of calendar 2009 through March 11, 2010. Mentor Graphics is the only one of the four that has given up some value since late December 2009. The combined G4 total price has not kept up with the NASDAQ Composite, and the G4 total Market Cap has remained flat.
EDA Big 3 vs. MCAD Top 3 Vendors
In past Commentaries, we have compared the most recent quarter's revenues and net incomes of the Big 3 EDA vendors (Cadence, Mentor, Synopsys) to those of the Top 3 MCAD vendors (Autodesk, Dassault, PTC).
For the nominal fourth quarter of 2009, the following totals apply:
EDA Consortium's Market Statistics
On January 14, 2010 the EDA Consortium (EDAC) Market Statistics Service (MSS) published its results. According to EDAC, the calendar Q3 2009 revenue for virtually the entire Electronic Design Automation (EDA) industry was $1,167.9 million, a 3.8% sequential increase from Q2 2009, but a 7.2% decline compared to $1,258.6 million in Q3 2008. The four-quarter moving average declined more than 13%.
“Just as the semiconductor industry has experienced sequential growth, the EDAC revenue numbers similarly represent a sequential (Q3 2009) increase over the previous quarter (Q2 2009),” said Dr. Wally Rhines, EDAC chair and chairman and CEO of Mentor Graphics. “Most notable sequential increases were in the categories of printed circuit board, semiconductor IP, and services.”
Companies that were tracked by EDAC employed 25,942 professionals in Q3 2009, down 7.9% from the 28,176 employed in Q3 2008, and down 1.4% from the 26,298 employed in Q2 2009.
Revenue by Product Category
Computer Aided Engineering (CAE), EDA's largest category, generated revenue of $450.1 million in Q3 2009. This represents a 3.3% decrease over the same period in 2008. The four-quarter moving average for CAE declined 15.6%.
In the next largest category, IC Physical Design & Verification, revenue decreased to $260.8 million in Q3 2009, a 10.0% decrease compared to Q3 2008. The four-quarter moving average declined 16.9% for IC Physical Design & Verification.
Printed Circuit Board and Multi-Chip Module (PCB & MCM) revenue increased 1.5% compared to Q3 2008, to $132.9 million. The four-quarter moving average for PCB & MCM decreased 10.6%.
Semiconductor Intellectual Property (SIP) revenue totaled $240.7 million in Q3 2009, a 10.1% decrease compared to Q3 2008. The four-quarter moving average for SIP decreased 8.0%.
Services revenue was $83.5 million in Q3 2009, a decrease of 20.3% compared to Q3 2008. The four-quarter moving average for services decreased 4.0%.
Revenue by Consuming Region
The Americas, EDA's largest region, purchased $511.2 million of EDA products and services in Q3 2009, representing an 8.0% decrease compared to Q3 2008. The four-quarter moving average was down 14.1% for the region.
Revenue in Europe, the Middle East, and Africa (EMEA) was down 17.6% in Q3 2009 compared to Q3 2008 on revenues of $204.0 million. The four-quarter moving average for EMEA was down 15.4%.
Q3 2009 revenue from Japan decreased 2.3% to $248.9 million compared to Q3 2008. The four-quarter moving average for Japan decreased 15.1%.
The Asia/Pacific (APAC) region increased to $203.8 million in Q3 2009, a 1.6% increase compared to the same quarter in 2008. The four-quarter moving average declined 4.7%.
The EDAC report for Q4 2009 will likely be released in April 2010.
About the Author of this EDA Industry Commentary:
Since 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. The number of client companies for HENKE ASSOCIATES now numbers more than forty. During his corporate career, Henke operated sequentially on "both sides" of MCAE/MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger Applicon, Gould Electronics, ATP, and Mentor Graphics. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. He is also a member of the IEEE and a Life Fellow of ASME International. In April 2006, Dr. Henke received the 2006 Lifetime Achievement Award from The CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. In February 2007, Henke became affiliated with Cyon Research's select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements Henke's ongoing, independent consulting practice (HENKE ASSOCIATES).
Taking on an additional assignment, Dr. Henke replaced Ms. Peggy Aycinena as a contributing editor of EDA Weekly in late October 2009. He has published five (5) articles since November; to access these articles, go to this URL and click on the desired issue:
Since May 2003 HENKE ASSOCIATES has now published a total of eighty-eight (88) independent articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADcafé and EDAcafé.
The most recent posting bearing on the EDA marketplace was the Electronics IP Industry Commentary issue #27 that first appeared on February 12, 2010, and may be accessed at this URL:
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March 31, 2010 will mark the 14th Anniversary of the founding of HENKE ASSOCIATES.
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