Commentary: EDA Industry Update August 2007 -- What did the Last Quarter Bring?

As guidance Synplicity expects revenue for the next quarter in the range of $19 million to $19.5 million, compared to $16.7 million in the quarter just reported, and compared to $16.2 million in the same quarter last year. Revenue for 2007 is expected to be in the range of $70.0 to $72.0 million, an increase from prior guidance. This compares to $62.5 million in 2006.

On July 31, 2007 the EDA Consortium's Market Statistics Service (MSS) announced that the EDA industry revenue for Q1 of 2007 grew 10% to $1,345 million, versus $1,223 million in Q1 2006. The four-quarter average growth rate, which compares the most recent four quarters to the same four quarters in the prior year, was 15%.

For the first quarter of 2007 the CAE segment accounted for 38.7% of total revenue, IC Physical Design and Verification for 26.5%, PCB/MCM 9.9%, Semiconductor IP for 18.2% and Services for 6.6%.

For the fourth quarter North America accounted for 46% of total revenue, Western Europe for 17%, Japan 23% and ROW 13%.

Aart de Geus, chairman of the EDA Consortium and chairman and CEO of Synopsys, said, "The same forces that we previously cited as drivers for EDA's continued growth apply to this quarter's figures. Consumer electronics and the continued move toward deeper sub-micron processes are fueling the need for advanced EDA tools in all segments of the industry."


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About the Authors:

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 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 also 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).

An part of the HENKE ASSOCIATES team since 2001, LA-based Dr. John R. (Jack) Horgan co-authored this August 2007 MCAD Industry Commentary. Dr. Horgan's prior corporate career has included executive positions at Applicon, Aries Technology, CADAM and MICROCADAM, as well as a stint at IBM. Dr. Horgan is also an editor of EDAcafe Weekly.

Since May 2003 the authors have now published a total of fifty-seven (57) independent articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé. Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at

A Parting Comment on the US Economy:

Here is a quote from an editorial by James Grant in the Sunday August 26, 2007 New York Times, regarding the recent turmoil in US stock markets: “Why does the Fed feel the need to intervene at the drop of a market? This is the notion that, while the risks inherent in the business of lending and borrowing should be finally borne by the public, the profits of that line of work should mainly accrue to the lenders and borrowers.”

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