EDA industry sees 11% revenue growth

By Suzanne Deffree, News Editor -- Electronic News, 10/31/2007

The electronic design automation (EDA) industry continues to report healthy growth for 2007, in terms of both revenue and employment, according to the EDA Consortium’s Market Statistics Service (MSS).

The group reported today that EDA industry revenue for Q2 grew 11.4 percent to more than $1.4 billion, versus the nearly $1.3 billion recorded in Q2 2006. The quarter also showed sales gains on a sequential basis, up from Q1’s $1.3 billion in revenue. The four-quarter average growth rate, which compares the most recent four quarters to the same four quarters in the prior year, was 14.6 percent for Q2.

“The EDA industry continues to see steady growth, maintaining the momentum that began this time last year,” said Aart de Geus, chairman of the EDA Consortium and chairman and CEO of Synopsys, in the group’s statement. “North America, Europe and rest of world all saw sequential growth in Q2 2007.”

Companies that were tracked employed 26,164 professionals in Q2, up from the 24,362 employed in Q2 2006 and from the 25,820 employed in Q1, the MSS data showed.

“The industry grew at a healthy clip again this quarter. This is particularly true for EDA in which two of the three revenue categories enjoyed double-digit growth, which is above the industry average,” Robert Gardner, executive director of the EDA Consortium, said in the statement.

Revenue by product category

EDA’s largest category, computer-aided engineering (CAE), generated revenue of $538.9 million in Q2, 12.8 percent more than the same period in 2006 and up from the $521 million reported in Q1, the group reported. Also up was IC physical design and verification revenue, which increased 15.8 percent to $397.2 million in Q2 compared to the same quarter in 2006. The segment reported $357 million in Q1 revenues. And semiconductor intellectual property revenue totaled $269.2 million in Q2, a 7.1 percent increase over Q2 2006 and a significant increase from the $245 million recorded in Q1.

Showing decreases in sales were revenue from the services and printed circuit board and multi-chip module (PCB & MCM) segments. Services revenue was $84.8 million in Q2, up 11.1 percent from Q2 2006, but down from the $89 million reported in Q1. PCB & MCM revenue increased 1.9 percent over Q2 to $118.7 million, but slipped from Q1 revenue of $133 million.

Revenue by consuming region

North America, EDA’s largest region, purchased $679.2 million of EDA products and services in Q2, a 13.2 percent increase over Q2 2006 and up compared to Q1’a $619 million, the data showed.

Western Europe revenue was up 7.9 percent compared to the year-ago quarter with Q2 revenue of $245.7 million. The quarter was also up compared to Q1’s $232 million.

Q2 revenue from Japan declined 8.5 percent compared to Q2 2006 to $244.8 million and was down significantly from Q1’s $314 million.

And the rest-of-world (ROW) continued to extend previous years of revenue growth by increasing a whooping 41.2 percent to $239 million in Q2 compared to the same quarter in 2006. Growth was also seen from Q1’s $181 million.