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Gabe Moretti
Gabe Moretti
In June 2012 Gabe Moretti will celebrate 44 years in EDA. Gabe has contributed to the industry first as a developer, then as a senior manager and now as an editor and industry observer. He is a Senior member of the IEEE and the recipient of the IEEE RonWaxman Meritorious Award. Gabe has worked … More »

Can EDA Replicate Its 2011 Growth This Year?

 
April 19th, 2012 by Gabe Moretti

Each quarter, the EDA Consortium publishes the Market Statistics Service (MSS) report containing detailed revenue data for the EDA industry. According to the latest information distributed by EDAC, overall fourth quarter 2011 EDA revenues increased 12.8% compared to the same period in 2010. Total revenue for Q4 was $1700.1 million. it is very interesting to me to note that the most authoritative research service covering EDA from the financial industry reports that revenues for the same period were $1.41 billion corresponding to an increase of 13% over the same period a year ago. There is clearly a discontinuity in the numbers.

EDAC can only use actual figures reported by its corporate members. Unfortunately for the consortium, Synopsys, a member, no longer shares its data with the organization and a few other large vendors of EDA tools are not members of EDAC. The result is that EDAC estimates the market contributions of important, non-reporting, companies and this can lead to inaccuracies. The error seems to be around 0.02% which is well within the acceptable error for forecasting purposes.

For the entire 2011 calendar year total EDA revenues were estimated to be $5.069 or 13.5% greater than 2010. The three largest companies (Cadence, Mentor, and Synopsys) account for approximately 75% of total revenue, while another half-a-dozen companies add another 13.6% to the total. Although 2012 appears to be a good year, growth will slow to a projected 7-8%.

Areas that will contribute significantly to the growth in revenue include: heterogeneous system designs, virtual prototyping, formal verification, emulation, power consumption analysis, and layout optimization.

The slowdown is due to two major factors: worldwide economy and a decrease in number of electronics companies using the very latest manufacturing process.

Negative Factors For 2012

The world is finding more difficult than expected to recover from the significant recession experienced in the 2008 – 2011 period. Although some positive signs can be seen in the manufacturing and even in the construction industries, the financial markets are still trying to find ways to recover while avoiding another setback. This is especially true for the US and European Union. Demands for energy sources like oil and natural gas by still growing countries, on the other hand, have significantly increased the price of gasoline and the utilities rates in western countries, further damaging the ability of consumers to sustain a robust recovery. Thus demands for products that have a high percentage of electronics components remains weak in general.

The cost of moving to the latest available semiconductors manufacturing process is high and made even higher by the complexities inherent in the design of such devices. Only companies that produce devices that have regular structures, such as memories and FPGA are exploring this process with partner foundries. This condition will persist for practically the entire year.

Non-the-less EDA industry should grow this year, fueled by a significant adoption of the 45 nm process node by most suppliers of electronics products. These companies, who continue to experience high function/price competition are leaving the comfort of 65 nm process in order to achieve higher functional integration and lower manufacturing costs. To do so, will require an investment in new design tools, the integration of new IP, and an increase in methods and tools for hardware/software integration and verification.

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