Europe falls behind in chip design market

Europe falls behind in chip design market
Market news |
Electronic System Design (ESD) industry revenue increased by over $1b in 2020, marking a new milestone for the industry but Europe falls behind
By Nick Flaherty

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The latest data from the ESD Alliance have shown Europe is falling behind in the chip design market in a period of significant growth.

The Q4 2020 Electronic Design Market Data report from the Alliance shows revenue increased 15.4% in Q4 2020 to $3,031.5m, up from $2,626.3m in Q4 2019. This is only the fourth time since 2011 that year-over-year growth exceeded 15 percent.

However Europe only grew 2.7 percent to $457.2m compared to Q4 2019, showing the smallest growth in the chip design market. Services, where Europe is strong, actually saw a decline. In comparison Asia Pacific (APAC) revenue increased 23.4 percent to $1,042 million.

The four-quarter moving average, which compares the most recent four quarters to the prior four quarters, rose by 11.6 percent, the highest annual growth since 2011 and the second highest in the last 14 years, highlighting the growth in chip design where Europe was intending to drive growth.  

“The industry reported a substantial double-digit year-over-year revenue increase for Q4 2020,” said Wally Rhines, Executive Sponsor of the report. “Overall industry revenue surpassed $3 billion for Q4, with increases in all geographic regions. The Computer Aided Engineering (CAE), IC Physical Design and Verification, Semiconductor IP (SIP), and Services categories also reported fourth-quarter growth.”

The companies tracked in the report employed 48,478 people in Q4 2020, a 6.7 percent increase over the Q4 2019 headcount of 45,416 and up 3 percent compared to Q3 2020.

the largest segement is CAE, where revenue increased 9.4 percent to $956.9 million compared to Q4 2019. The four-quarter CAE moving average also increased 9.4 percent.

IC Physical Design and Verification revenue increased 36.6 percent to $637.1 million compared to Q4 2019. The four-quarter moving average for the category rose 12.3 percent.

However Printed Circuit Board and Multi-Chip Module (PCB and MCM) revenue decreased 0.8 percent to $292.9 million compared to Q4 2019. The four-quarter moving average for PCB and MCM increased 4.3 percent.

System in package (SIP) revenue increased 16.9 percent to $1,052.9 million compared to Q4 2019. The four-quarter SIP moving average grew 17.1 percent.

Services revenue increased 2.2 percent to $91.6 million compared to Q4 2019. The four-quarter Services moving average decreased 2.4 percent.

The Americas, the largest reporting region by revenue, purchased $1,304 million of Electronic System Design products and services in Q4 2020, a 15.8% increase compared to Q4 2019. The four-quarter moving average for the Americas increased 9.9%.

Europe, the Middle East, and Africa (EMEA) revenue increased 2.7%, to $457.2 million compared to Q4 2019. The four-quarter moving average for EMEA grew 6.3%.

Japan revenue increased 8% to $228.2 million compared to Q4 2019. The four-quarter moving average for Japan rose 8.2%.

Asia Pacific (APAC) revenue increased 23.4% to $1,042 million compared to Q4 2019. The four-quarter moving average for APAC increased 17.1%.

The Electronic Design Market Data (formerly the Market Statistics Service) reports EDA, IP and services industry revenue data quarterly and is available from SEMI which hosts the ESD Alliance. Both public and private companies contribute data to the report.

esd-alliance.org

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