August 23, 2004
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Dr. Russ Henke and Dr. Jack Horgan - Contributing Editor

by Dr. Russ Henke and Dr. Jack Horgan - Contributing Editor
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On August 2, 2004 the EDA Consortium's Market Statistics Service (MSS) announced that the electronic design automation (EDA) industry revenue for Q1 of 2004 was $995 million, a 6% increase over Q1 2003. Walden C. Rhines, chairman of the EDA Consortium and chairman and CEO of Mentor Graphics Corporation said “The growth in services and SIP revenue is a good indicator of renewed design activity. This should point to further tools revenue down the road.”

Table 7 Revenue by Product Category

The geographic distribution was

Table 8 Revenue by Geography

According to the World Semiconductor Trade Statistics (WSTS), the world semiconductor market reached a size of $166B in 2003. The WSTS predicts that the year 2004 will grow 28.4% over 2003, which is a 9-percentage point improvement over the growth projections made last autumn. For the following years, a deceleration in growth is forecast to 8.5% growth in 2005, followed by virtually zero growth in 2006. In 2007, another recovery cycle is expected to begin, with market growth in the 10% range. According to the press release:

“While the forecasted semiconductor market growth cycle is smoother than previous cycles, the different regions and products maintain their historical patterns. That is, the memory product cycle is more pronounced than the other products and Asia Pacific continues to be the fastest growing region, due not only to a continuing shift in equipment production but also to rising internal demand in those countries. The growth of equipment production in Mainland China will help sustain faster than average growth in Asia throughout the forecasting period."

Table 9 Semiconductor Market by Geography

Table 10 Semiconductor Market by Product Sectors


About the Authors:

Since 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management con
sulting firm. 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 Grap
hics. 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 Fellow of ASME International. An affiliate of the HENKE ASSOCIATES team since 2001, LA-based D
r. John R. (Jack) Horgan co-authored this article.
Jack's career has included executive positions at Applicon, Aries Technology, CADAM and MICROCADAM, as well as a stint at IBM. Si
nce May 2003 the authors have now published a total of nineteen (19) articles on MCAD, PLM, EDA and Electronics IP on IBSystems' M
CADcafi and EDAcafi. Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at

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