Commentary: EDA Industry Update – July 2010 What did nominal Q1 2010 Bring?




The chart below this paragraph exhibits the relative stability of Synopsys (SNPS - blue line), but Synopsys also nearly paralleled the NASDAQ (green line) and it too closed lower for the quarter.



While two days of price changes would not be discernable visually in multi-month charts like the above, the two days between June 28 and June 30 (the latter is the end date for Q2 used in Table 4) saw major drops in all four of the G4 stocks and in the NASDAQ, showing how volatile the markets were at the end of Q2 2010:







 

The following report was released subsequent to press time of the EDA Industry Commentary for July 2010:

On July 13, 2010 The EDA Consortium (EDAC) Market Statistics Service (MSS) announced that the Electronic Design Automation (EDA) industry revenue for Q1 2010 was $1247 million, a 4.6% increase compared to $1192.1 million in Q1 2009. Sequential EDA revenue declined 1.2% from Q4 2009, while over the last four quarters it declined 5.9%.

“Led by increases in the CAE and Semiconductor IP categories, the EDAC revenue numbers show an increase over Q1 2009,” said Dr. Walden Rhines, EDAC chair and chairman and CEO of Mentor Graphics.

“Geographically, the Asia/Pacific region showed growth both year to year and quarter over quarter.”

Companies that were tracked employed 26,099 professionals in Q1 2010, up 0.4% compared to Q4 2009, but down 1.7% from Q1 2009.

Revenue by Product Category

Computer Aided Engineering (CAE), EDA’s largest category, generated revenue of $458.5 million in Q1 2010. This represents a 7.2% increase over the same period in 2009. Over the last four quarters, CAE declined 3.5%.

IC Physical Design & Verification revenue decreased to $274.4 million in Q1 2010, a 9.2% decrease compared to Q1 2009. Over the last four quarters, IC Physical Design & Verification declined 8.3%.

Printed Circuit Board and Multi-Chip Module (PCB & MCM) revenue decreased 8.8% compared to Q1 2009, to $109.4 million. Over the last four quarters, PCB & MCM decreased 8.9%.

Semiconductor Intellectual Property (SIP) revenue totaled $320.9 million in Q1 2010, a 35.8% increase compared to Q1 2009. Over the last four quarters, SIP decreased 0.1%.

Services revenue was $83.7 million in Q1 2010, a decrease of 20.7% compared to Q1 2009. Over the last four quarters, services decreased 21.7%.

Revenue by Consuming Region:

The Americas, EDA’s largest region, purchased $492.9 million of EDA products and services in Q1 2010, representing a decrease of 0.2% compared to Q1 2009. Over the last four quarters, the Americas were down 5.5%.

Revenue in Europe, the Middle East, and Africa (EMEA) was up 0.5% in Q1 2010 compared to Q1 2009 on revenues of $224.2 million. Over the last four quarters, EMEA was down 13.1%.

First quarter 2010 revenue from Japan decreased 1.9% to $250.8 million compared to Q1 2009. Over the last four quarters, Japan decreased 9.1%.

The Asia/Pacific (APAC) region increased to $279.0 million in Q1 2010, a 33.2% increase compared to the same quarter in 2009. Over the last four quarters, APAC increased 7.0%.

The EDAC MSS Report:

The EDA Consortium Market Statistics Service reports EDA industry revenue data quarterly and is available by annual subscription. Both public and private companies contribute data to the report. Each quarterly report is published approximately three months after quarter close. MSS report data is segmented as follows: revenue type (product licenses and maintenance, services, and SIP), application (CAE, PCB/MCM Layout, and IC Physical Design and Verification), and region (the Americas, Europe Middle East and Africa, Japan, and Asia Pacific), with many subcategories of detail provided. The report also tracks total employment of the reporting company.

The EDA Consortium self description:

The EDA Consortium is the international association of companies that provide design tools and services that enable engineers to create the world's electronic products used for communications, computer, space technology, medical, automotive, industrial equipment, and consumer electronics markets among others. For more information about the EDA Consortium, visit www.edac.org, or to subscribe to the Market Statistics Service, call (408) 287-3322 or email mss10@edac.org.

 

#####



[1] Footnote: Why is a “nominal” first quarter used in the vendor by vendor comparisons in this EDA COMMENTARY? A nominal quarter system was adopted by Henke Associates for its COMMENTARIES years ago, to ensure consistency in reporting quarterly financial results from year to year, regardless of the decisions (within reason) of individual members of the chosen group in defining (and occasionally changing) when its fiscal years begin and regardless of when its fiscal quarters begin, compared to the universal constant of the yearly and monthly Gregorian calendar in common use today.

The EDA G5 vendors provide examples of the differences each has chosen for its current reporting of quarterly results for our “nominal” Q1 2010, in the Footnote Table F1 below:



Acknowledgments:

The writer would like to acknowledge the sources of data and information for this Electronics Industry Commentary for July 2010: Vendor News Releases; Hoover's; Yahoo! Finance; Google Finance; and The SIA. Ongoing support by the team at IBSystems, Inc., including but not limited to Sanjay Gangal, Adam Heller, David Heller, Jon Heller, Nitai Fraenkel, and Sumit Singhal, is also appreciated.

####



About the Author of this July 2010 Electronics Industry Commentary:

Since 1996, Dr. Russ Henke has been and remains active as 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 MCAE/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. Henke was also a board member of SDRC, PDA, ATP, and the MacNeal Schwendler Corporation, and he currently serves on the board of Stottler Henke Associates, Inc. Henke 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 became 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). Dr. Henke is also a contributing editor of the EDACafé EDA WEEKLY, and he has published nine (9) monthly articles since November 2009; URL's available.

 

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  • Always interesting. July 09, 2010
    Reviewed by 'S. Lee Ryan'
    I have workd with Dr. Henke in the past and will say he was most helpful and insightful as well as practical in his knowledge. I look forward to reading his articles here very much. Thanks, Russ

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