Jay Vleeschhouwer, managing director of Griffin Securities, has followed the electronic design automation (EDA) industry as a leading financial analyst for 25 years and is a popular speaker at the annual Design Automation Conference (DAC).
I spoke with Vleeschhouwer after attending his presentation The State of EDA: A View from Wall Street at this year’s DAC.
Smith: According to your DAC presentation, EDA revenues more than doubled over the past decade and have become more concentrated to four companies. Do you see that changing with emerging silicon intellectual property (SIP) suppliers or application-specific EDA companies?
Vleeschhouwer: I wouldn’t rule it out. Share changes don’t necessarily go only in one direction, although that seems to have been the case for many, many years. As you point out, EDA has become substantially more concentrated. The Big Four – Ansys, Cadence, Siemens EDA (formerly Mentor Graphics) and Synopsys – have approximately 90% of the industry revenue, a combination of Core EDA or the software business, plus SIP that has become a substantial business, particularly for Synopsys.
And then, there is hardware-based verification that factors into the growth of the industry and includes three of the largest suppliers – Cadence, Siemens EDA and Synopsys. Given the obvious importance of SIP and the willingness of customers over the last decade or more to purchase commercially from vendors such as Synopsys and Cadence, in principle, there would be room for more players. For an emerging company, we’ll see how that develops.
