Semiconductor IP Comes of Age

I love reading about good news in the EDA and Semiconductor IP space, especially in light of the recent stock market trending downward in January. The best news that I’ve read in the past week is about the Q3 2015 revenue numbers collected by EDAC, because it shows that Semiconductor IP (SIP) surpassed CAE tool revenues for the very first time ever. I’ve been reading about the growth of IP revenues over the years, and it is now larger than CAE sales. Here is the table showing that SIP had revenues of $652.9 million in Q3 2015 for an annual increase of 11.4%, while CAE revenues were at $634.7 million a 5.0% increase.

Q3 2015 EDA Revenue Growth by Category

Companies like Synopsys and Cadence have invested strongly in SIP, so it’s no surprise that they are still the #1 and #2 EDA companies, respectively. Mentor Graphics is strong in the category of IC Physical Design & Verification which saw the largest percentage increase of 14.0%. The downside of Q3 2015 was in the low-margin category of Services with an 11.4% decline, followed by the mature category of PCB & MCM with a 3.0% decline.

Finally, the Japan region experienced growth of 8.3% after years of under-performing the rest of the world. Asia Pacific (APAC) lead again with a growth of 11.6%.

Q3 2015 EDA Revenue Growth by Regions

The largest region of EDA revenues remains the Americas at 48%, followed by: APAC, EMEA, Japan.

Q3 2015 EDA Revenue by Region

It’s fun to look at EDA revenues for the past 20 years, where we can see the steady increase of SIP and CAE especially after the 2009 melt down period.

20 Years of EDA Revenue: 1996-2015

When we look at the stock market performance of EDA and IP stocks over the past six months it shows a downward trend of:

• Dassault Systemes, -2.67%
• Cadence Design, -5.15%
• Ansys, -7.92%
• ARM, -11.67%
• Synopsys, -19.95%
• Mentor Graphics, -37.78%
• Imagination Technologies, -48.76%

Past 6 Months Stock Prices, EDA and SIP

Let’s hope that this stock price decline has bottomed out and will correct in 2016.

To get more details about the EDA Market Statistics visit here.

(Full disclosure – I own none of the stocks mentioned in this blog)

About EDAC
The Electronic Design Automation Consortium (EDAC) is the international association of companies developing EDA tools and services that enable engineers to create the world’s electronic products. The EDAC mission is to promote the health of the EDA industry, and to increase awareness of the crucial role EDA plays in today’s global economy.

EDAC has a number of committees focused on issues of common interest where members can meet to influence and stay abreast of industry initiatives; initiatives such as Anti-Piracy, Export Controls, and the Industry OS Roadmap. By focusing on commonality and promoting cooperation, the EDA Consortium augments the effectiveness of the tools, services, and communications provided by its members for the customer community that the member companies serve.