EDA logged strongest Q2 growth in 10 years
EDA revenue, including intellectual property, hit $1.438 billion in the second quarter, an increase of 17.6 percent compared to the second quarter of 2010, EDAC said. But while the 17.6 percent annual growth was the highest in a second quarter in over a decade, sales declined sequentially 0.6 percent compared to the first quarter, according to the report by EDAC’s market statistics service.
In the past 10 years, only two quarters have shown stronger growth in EDA revenue, the fourth quarter of 2006 and the fourth quarter of 2010, according to EDAC.
EDA growth typically lags behind semiconductor industry growth by about a year, according to Walden Rhines, chairman of EDAC and chairman and CEO of Mentor Graphics Corp. During a downturn and its immediate aftermath, chip companies sometimes put off investment in EDA software, he said. This leads to pent up demand that translates into increased sales after chip companies are certain that they are in an upswing, he said. EDA is now benefitting from a 2010 that saw the semiconductor industry bounce back from recession to growth by more than 30 percent, Rhines said.
"It really is a whopping set of numbers," Rhines said of the EDAC second quarter report. It’s really, really strong, pretty much across the board."
EDA’s largest category, computer aided engineering, had sales of $549.8 million in the second quarter, up 19.8 percent from the second quarter of 2010, EDAC said. Revenue from the IC physical design and verification category grew to $286.9 million in the second quarter, up 5.8 percent from the second quarter of 2010, EDAC said.
Printed circuit board and multi-chip module revenue was up 21.7 percent year-over-year, reaching $144.9 million, EDAC said. Semiconductor intellectual property revenue was up 22.6 percent year-over-year to $367.7 million, EDAC said. Services revenue was $88.8 million in the second quarter, up 19.9 percent compared to the second quarter of 2010, EDAC said.
EDA product and services revenue from the Americas region hit $626.1 million in the second quarter, up 21.1 percent from the second quarter of 2010. Revenue from Europe, the Middle East and Africa grew 8.8 percent year-over-year to reach $246.5 million, EDAC said.
Revenue from the Japan region increased 17.8 percent year-over-year to reach $253.9 million, EDAC said. Revenue from the Asia-Pacific region was up 18.1 percent year-over-year, reaching $311.6 million, EDAC said.
Companies tracked by EDAC employed 26,721 professionals in the second quarter, an increase of 1 percent compared to the first quarter and an increase of 2.9 percent compared with the second quarter of 2010, EDAC said.
Rhines acknowledged that semiconductor companies are reporting a softening of demand that could translate into tougher quarters for EDA down the road. But he said because the base of EDA users has grown to include a lot more systems vendors, leaving EDA less vulnerable to the cycles of the semiconductor industry.