EDA revenue, employment up

EDA industry revenue for Q3 2007 grew 7.2% to more than $1.4 billion; employment was up 8.1% year over year.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 1/15/2008

Both revenue and employment are up in the EDA industry, with significant growth coming from outside North America, the EDA Consortium (EDAC) has reported.

According to the group, EDA industry revenue for Q3 2007 grew 7.2% to more than $1.4 billion, near flat with Q2 2007 EDAC numbers and up from the $1.3 billion recorded in Q3 2006. The four-quarter average growth rate, which compares the most recent four quarters to the same four quarters in the prior year, was 12.3%.

"Compared to the same quarter last year, the worldwide EDA and IP industry showed continued growth in Q3 2007, with particular strength in Western Europe, Japan, and the rest-of-world," said Robert Gardner, executive director, EDA Consortium, in a statement released Monday. "Overall revenue increased, as did employment in EDA."

Companies that were tracked by EDAC employed 27,254 professionals in Q3, up 8.1% from the 25,214 employed in Q3 2006. Q2 saw 26,164 professionals employed in the EDA industry.

Revenue by product category

EDA's largest category, computer aided engineering (CAE), generated revenue of $564.6 million in Q3, representing a 13.4% increase over the same period in 2006. The increase is slightly less impressive on a sequential basis when compared to Q2’s CAE revenue of $538.9 million. The four quarter moving average CAE growth rate was 12.3%.

"The industry shows solid growth again this quarter, especially in computer aided engineering. Although positively impacted by broader participation in terms of reporting companies, the four-quarter moving average reveals double-digit growth in the top product segments," said Aart de Geus, chairman of EDAC and CEO of Synopsys Inc, in the statement.

For IC physical design and verification, EDA’s second largest category, revenue increased to $372.8 million in Q3, a 5.4% gain compared to Q3 2006, but was down as compared to the $397.2 million reported for Q2.

Semiconductor intellectual property revenue totaled $263.2 million in Q3, a 3.5% increase over Q3 2006, but was also down quarter over quarter as compared to Q2’s $269.2 million in revenue.

Moreover, services revenue was $83.8 million in Q3, up 11.9% from Q3 2006, but down from Q2’s $84.8 million.

Printed circuit board and multi-chip module revenue decreased 6.4% year over year in Q3 to $127.7 million, but was up from Q2’s $118.7 million in revenue.

Revenue by consuming region

North America, EDA's largest region, purchased $624.2 million of EDA products and services in Q3, according to the EDAC data, a 1.9% decrease compared to Q3 2006 and a $55 million decrease from Q2’s $679.2 million.

The region’s decreases were offset by increases across the globe. Western Europe revenues of $284.5 million were up 13% in Q3 compared to Q3 2006 and up as compared to Q2’s $245.7 million.

Japan Q3 revenue of $300.9 million increased 14.2% year over year and more than $55 million as compared to Q2’s $244.8 million.

And rest-of-world (ROW) revenue increased to $202.4 million, a 22.2% climb compared to the same quarter in 2006. However, ROW revenue declined sequentially from Q2’s $239 million.