Commentary: EDA Industry Update – March 2010 What did the Last Quarter Bring?

Commentary:

EDA Industry Update – March 2010 What did the Last Quarter Bring?

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by Dr. Russ Henke
Henke Associates

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IMPORTANT NOTICE

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.

In each of the 27 quarterly EDA Industry Commentaries published in EDAcafe.com since May 2003 by Henke Associates, the then-current yearly and quarterly financial performances of a selected group of publicly traded Electronic Design Automation (EDA) companies were analyzed and compared. Expectations regarding the future financial performances of these same EDA entities were documented as well. The originally selected companies were Altium, Ansoft, Cadence, Magma, Mentor Graphics, Nassda, Synopsys, Synplicity and Verisity.

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:

http://www.sia-online.org/cs/papers_publications/press_release_detail?pressrelease.id=1715



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.