Down Less, But Still Down
By Ed Sperling
You have to look pretty hard in the EDA Consortium’s most recent numbers to find good news, and even that’s relative.
The first quarter everywhere was painful. EDA did better than most industries, and it certainly did better than the semiconductor industry as a whole, but that’s still in relative terms. For example, the number of jobs decreased 2.8% in Q1 of 2009 compared with the same quarter in 2008. But add that up with the drop in the overall EDA market—down 10.7% in Q1 2009 vs. Q1 of 2008 and you begin to see a deeper drop. What jobs remained often came with a price, namely forced time off—a number of companies are shutting down for a week or more this summer—and more work to do while employees are on the job.
“In general, designers have a skill that’s valuable,” said EDAC Chairman Wally Rhines. “The total number of designers is not down because of the recession, and they’re usually the ones that are laid off because design activity doesn’t drop that much. You still need good products, and you especially need them coming out of the recession.”
Still, there has been some displacement of jobs, which seems to have contributed to the rise of services revenues. Normally in downturns service revenue declines because companies take work inside rather than outsourcing. That wasn’t the case this time. Services rose 20.8% to $105.7 million.
Rhines noted that while EDA has improved overall, it is still in “uncharted territory.” In past downturns, EDA still managed to stay in positive territory. That isn’t the case this time.
“The number of designers will increase in the long term,” he said. “In the short term, there is a negative hit.”
By sector, EDAC reported the following for Q1 2009 vs. 2008:
- CAE: $427.9 million in revenue, down 18.8%
- IC Physical Design and Verification: $119.9 million, down 7.1%
- Intellectual property: $236.3 million, down 12.8%
By region, the Americas were down 11.6%, EMEA was down 15.9%, Japan was down 17.7% and Asia/Pacific was up 11.5%.
