Downturn Update: EDA Sales Slid Again Last Quarter
By Ed Sperling
The market for EDA and IP was down in Q4 of 2008. That should come as no surprise to anyone.
Nevertheless, there were a couple of bright spots even in that bleak picture. Statistics compiled by the EDA Consortium show IP sales were up 7.6 percent, which is a reflection of increased complexity in making SoCs at 65nm and 45nm, as well as better tools and standards for integrating that IP.
IP is about a $1 billion market, according to EDAC Chairman Wally Rhines. Within that sector, ARM is by far the largest single provider of IP and posted most of the gains, he said. Other beneficiaries include MIPS, Virage Logic, Denali, the IP divisions of Mentor Graphics and Synopsys, and a number of smaller players.
Other bright spots:
· Parasitic extraction, up 10%
· Process simulation, up 18%
· Mixed Signal, up 39%
· Services, up 25%, although much of that is due to eliminating contractors and taking the work in-house.
Most of the growth follows the trends in system-level design, with the greatest growth showing up in the areas of most pain. Since those numbers were recorded, however, there also are glimmers of life in other parts of the industry.
“What we’re seeing is a bounceback from desperation in the fourth quarter to a point now where there is a need for finished goods,” Rhines said. “The February [Semiconductor Industry Association] numbers were negative. In March, there were signs of a bounceback. But the semi industry and electronics tend to sort out early and prices readjust. EDA is one level removed from semiconductors, which makes it harder to read anything into the numbers.”
The total EDA industry was down 17.7%. But industry sources say at least part of that was skewed by Cadence’s change in the way it recognizes revenue, from up-front recognition to recording revenue as it is received. Taking Cadence out of the picture, the industry declined about 8%. That’s still severe, but at least it’s a single-digit decline.
Still, the tools industry is hardly on solid ground. More than half of semiconductor companies are rated “B” or worse. If a number of semiconductor companies go out of business, the overall effect on the EDA industry would be profound.
On a global basis, Europe’s decline was in the single digits while the rest of the world showed double-digit declines. Europe is very system-oriented, but some of its chip makers have stumbled badly in the downturn.
Tags: ARM, business, Cadence, economics, EDA, IP, Mentor Graphics, MIPS, Synopsys, Virage Logic