Latest MSS Report: Our Sector Remains Strong

I’m taking a timeout from SEMICON West to offer some good news on the results from our most recent Market Statistics Service (MSS) announced last week.

Electronic Design Automation (EDA) industry revenue increased 3.5% in Q1 2020 to $2,698 million, compared to $2,606.4 million in Q1 2019. The four-quarter moving average that compares the most recent four quarters to the prior four quarters increased by 5.2%.

Before I go further, I’ll grab a brief intermission to talk about the MSS (the full report available to ESD Alliance members) to those who aren’t familiar with it. For more than 20 years, MSS has reported EDA, IP and services industry revenue data quarterly with public and private companies contributing to the report. Data is reported quarterly after a quarter closes in confidence to an independent auditing firm.

MSS report revenue data is aggregated and segmented by product categories and regions with many subcategories of detail provided. Every report includes tables with current year-to-date revenue along with the three previous years by quarter, allowing companies to review trends affecting their specific product segments. The report also lists total employment of the tracked companies.

With that background, let’s review the results.

Revenue by Product Category

• Computer-aided engineering (CAE) generated revenue of $854.9 million in Q1 2020, a 1.7% increase compared to Q1 2019. The four-quarter CAE moving average increased 2.4%.
• IC Physical Design and Verification revenue reached $507.9 million in Q1 2020, an 8.9% decrease compared to Q1 2019. The four-quarter moving average for the category increased 2.4%.
• Printed circuit board (PCB) and multi-chip module (MCM) revenue of $250.9 million for Q1 2020 represents an increase of 12% compared to Q1 2019. The four-quarter moving average for PCB and MCM increased 14.1%.
• Semiconductor intellectual property (SIP) revenue totaled $985.6 million in Q1 2020, a 12.5% increase compared to Q1 2019. The four-quarter SIP moving average increased 9.6%.
• Services revenue totaled $98.7 million in Q1 2020, an 8.6% decrease compared to Q1 2019. The four-quarter Services moving average decreased 12.1%.

Revenue by Region

• The Americas, the largest reporting region by revenue, purchased $1,118.1 million of EDA products and services in Q1 2020, a 0.5% increase compared to Q1 2019. The four-quarter moving average for the Americas increased 0.5%.
• Revenue in Europe, the Middle East and Africa (EMEA) increased 13.4%, to $392.3 million, in Q1 2020 compared to Q1 2019. The EMEA four-quarter moving average increased 11.1%.
• First-quarter 2020 revenue for Japan increased 9.8% to $268.6 million compared to Q1 2019. The four-quarter moving average for Japan decreased 3.9%.
• Americas, EMEA and Asia Pacific (APAC) revenue increased to $918.9 million in Q1 2020, an increase of 1.8% compared to the first quarter of 2019. The four-quarter moving average increased 6.9%.

According to the MSS report, companies employed 45,938 in Q1 2020, a 5.6% increase over the Q1 2019 headcount of 43,500 and up 1.1% compared to Q4 2019.

Our sector of the semiconductor market remains strong. Long-time MSS proponent Walden C. Rhines, CEO Emeritus of Mentor, a Siemens Business, agrees. He had this to say in a quote in the news release: “The EDA industry reported increased revenue in Q1 compared to Q1 2019, in part due to strong growth in the largest product category, SIP. The PCB and MCM category also reported double-digit gains in Q1. The four-quarter moving average continued to increase for the PCB and MCM, CAE, IC Physical Design and Verification and SIP categories, and in APAC.”

Of course, the MSS report is rich with much more detail and available to ESD Alliance members companies each quarter. Not a member? Consider joining today for this and other programs and initiatives we sponsor. Also, the ESD Alliance is now a SEMI Strategic Technology Community. Companies can join SEMI and apply to become a member of the ESD Alliance at no extra cost.

Meanwhile, if you haven’t checked out SEMICON West, I encourage you to do so. As Bob Smith, executive director of the ESD Alliance, wrote in his last blog post, 25% of SEMICON West attendees are interested in design and IP. Check the SEMICON West website for registration for information about an All-in Pass or a complimentary Expo Pass.

To learn more about the ESD Alliance and our other programs and initiatives, visit the ESD Alliance website or contact me at pcohen@semi.org.

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