 
Commentary: Electronics IP Industry — A May 2006 Update
by Dr. Russ Henke and Dr. Jack Horgan
Henke Associates
In their
September 2003,
December 2003,
February 2004,
May 2004,
August 2004,
November 2004,
February 2005,
May 2005,
August 2005,
November 2005 and
February 2006
Electronics IP Industry Commentaries, the authors examined the recent financial histories and future outlooks of the remarkable phenomenon of Electronics Intellectual Property (IP) providers, a niche that has emerged in its own right to claim a substantial amount of revenue in the world of Electronics Design Automation. We had arbitrarily selected eight (8) publicly-traded companies originally (then called the "Group-of-8" or "G8"), as representative of the current financial state of the Electronics IP industry. At the end of 2004, ARM completed its acquisition of Artisan Components, Inc., thereby reducing our "G8" to "G7". Accordingly, in this
May 2006 Commentary, we look at the financial performances of the "G7" Electronics IP vendors during
the first quarter of 2006.
Group-of-7 ("G7"):
ARM Holdings, plc
Ceva, Inc.
LogicVision, Inc.
MIPS Technologies, Inc.
MoSys, Inc
Rambus, Inc.
Virage Logic Corporation |
Cambridge, UK
San Jose, CA
San Jose, CA
Mountain View, CA
Sunnyvale, CA
Los Altos, CA
Fremont, CA |
For the "G7" companies above, we assume that all of their revenues are Electronics IP sales and directly related IP services.
Recent Electronics IP News Highlights
On May 1, 2006, the Semiconductor Industry Association (SIA) reported that worldwide sales of semiconductors of $59.1 billion in the first quarter of 2006 were 7.3% higher than the first quarter of 2005, when global sales were $55.1 billion. First-quarter sales declined by 1.3% from the fourth quarter of 2005, when semiconductor sales were $59.9 billion. The SIA said the sequential decline reflected normal seasonal patterns.
How did the Electronics IP G7 perform in the First Quarter of 2006?
On the
revenue front,
Table 1 below reveals that the G7's combined Q1 2006 performance was up 9.5% year-over-year. Percentage-wise, MoSys led the pack with 31% growth. Rambus and Virage Logic had growth approaching 20%. LogicVision and Ceva were the largest decliners at -36% and -19%, respectively.
On a sequential basis, growth of the G7 was still positive, at 7.2%. MoSys was again the percentage growth leader at 47% with Rambus and Virage Logic next, with 14% and 11% growth, respectively. Only LogicVision had a decline relative to the previous sequential quarter.
|
Company |
Last
QTR
Revenue
|
Prev
QTR
Revenue
|
Last
vs.
Prev QTR
|
Comparable
2005
QTR
|
Last QTR
vs.
Comparable
QTR
|
| ARM £ |
64,634 |
62,893 |
2.8% |
55,017 |
17.5% |
| ARM $ |
113,050 |
108,817 |
3.9% |
103,400 |
9.3% |
| Ceva |
8,134 |
7,681 |
5.9% |
10,021 |
-18.8% |
| LogicVision |
2,349 |
2,470 |
-4.9% |
3,677 |
-36.1% |
| MIPS |
17,497 |
16,375 |
6.9% |
16,795 |
4.2% |
| MoSys |
3,522 |
2,402 |
46.6% |
2,683 |
31.3% |
| Rambus |
47,245 |
41,589 |
13.6% |
39,611 |
19.3% |
| Virage Logic |
15,196 |
13,725 |
10.7% |
12,784 |
18.9% |
|
Total |
206,993 |
193,059 |
7.2% |
188,971 |
9.5% |
Table 1 Quarterly Revenue of the Group-of-7 (G7) IP Providers
(US$000)
Figure 1 below provides a bar graph of each vendor's revenue for Q1 2005, Q4 2005, and Q1 2006 in sequence. ARM is obviously the dominant revenue player with 55% of the G7 total. Rambus is second with 23%. MIPS and Virage Logic are next with 8% and 7%, respectively.
Figure 1 Quarterly Revenues of the Group-of-7 (G7) IP Providers
(US$ millions)
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