The Breker Trekker
Tom Anderson, VP of Marketing
Tom Anderson is vice president of Marketing for Breker Verification Systems. He previously served as Product Management Group Director for Advanced Verification Solutions at Cadence, Technical Marketing Director in the Verification Group at Synopsys and Vice President of Applications Engineering at … More »
The Ever-Changing EDA Landscape
April 16th, 2015 by Tom Anderson, VP of Marketing
In last week’s post on The Breker Trekker blog, we surveyed the semiconductor market for the past 15 years or so from the standpoint of revenue leadership. Wikipedia provides a set of tables showing the top 20 semiconductor vendors for each year. We compiled this data into a single table, and found that this revealed some clear trends of how the industry has evolved during this period. The many spin-offs, mergers, acquisitions, and bankruptcies resulted in constant changes in the lower ranks of the top 20, and even some shuffling among the top players. This topic proved to be of great interest to our readers, with this week-old post surpassing many popular older posts.
Last week we also contrasted the semiconductor market with the EDA market, in which the top three revenue leaders have been the same for more than 20 years. Unlike semiconductors, there are almost no other EDA companies beyond the top three that were around 15-20 years ago and still exist today. We have had many spin-offs, mergers, acquisitions, and bankruptcies in our industry as well. Like semiconductors, we have had many changes in rankings beyond the very top tier, so we thought that we would try this week to create a similar chart and perform a similar analysis for EDA. However, this has not proven possible. We’d like to explain why and offer some more thoughts on the EDA market and how it differs from semiconductors.
We’ve done some looking around, but so far have not been able to find an EDA equivalent to the iSuppli market rankings shown in Wikipedia. It’s not as if the EDA market is completely untracked. Industry guru Gary Smith has been watching and reporting for many years, first with Dataquest, then Gartner, and now with his own company. The trade association Electronic Design Automation Consortium (EDAC) receives reports of revenue from most EDA companies and publishes market-share segment (MSS) reports. However, as far as we know, neither of these channels reports the sort of simple, revenue-based top 20 lists that we used last week for semiconductors.
The primary reason for this is that most smaller EDA companies are private, and therefore do not report financial results publicly. EDAC receives detailed revenue results by product category and region from many vendors, but works through an independent agency and goes to considerable lengths to ensure that private results cannot be gleaned from their reports. With all the challenges of the IPO market in recent years, it is very rare for an EDA company to go public. So, unlike the top 20 (and beyond) semiconductor vendors, at any given point in time it’s likely that at least half of the top 20 EDA suppliers are private. Of course, this makes compiling a definitive ranking just about impossible.
We can still make some observations about the EDA industry based on our knowledge and the information available from the public companies. The most obvious trend is one of consolidation. All three major vendors have grown via acquisitions as well as organically. In fact, most of the middle tier of EDA has disappeared as the companies have been acquired by the top three. In the verification space, Denali, Jasper, and SpringSoft are probably the best known recent examples of this trend. Earlier names include Avant!, Verisity, and Magma. Despite some slowdown in startups, there are still many EDA companies reaping less than US$10M per year in revenue. As the more successful of these grow, it is likely that they will be acquired as well.
The SemiWiki site has a fascinating page detailing the M&A history of EDA, including IP. We’ve contributed information to this page as have many others; crowdsourcing has yielded a list that’s likely the best available if not definitive. The following list summarizes just a few of the market changes during the last half-dozen years:
This list is only a small sample of how EDA has evolved. The SemiWiki page lists about 100 companies that have combined to form today’s Cadence, and even more for Mentor and Synopsys. One readily available metric for EDA evolution is the list of companies participating in the annual Design Automation Conference (DAC). We’re considering compiling a matrix listing all the companies and the years they exhibited for a future blog post. That would be fun, but in the meantime please tell us whether you like these business-oriented posts and feel free to suggest other topics that we should cover.
The truth is out there … sometimes it’s in a blog.
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