Los Angeles, CA (PRWEB) February 16, 2013
The Electronic Design Automation (EDA) Software Developers industry benefits from strong underlying demand for its services. Over the five years to 2013, revenue is expected to increase at an annualized rate of 11.6% to $2.1 billion.
EDA software is essential to the design and development of microchips, which are essential to a multitude of consumer and business applications involving computers and other electronic devices. As microchip technology has continually improved, industry software has been increasingly demanded to research and test new designs and reduce the costs associated with the chip design process, says IBISWorld industry analyst Kevin Boyland. Additionally, as the price of semiconductor and associated electronic components has continuously decreased, microchips have been used in more applications, driving demand for EDA software. As a result, revenue is anticipated to grow 5.9% through 2013.
Although the industry rebounded strongly after the recession, the past five years were not without their challenges. For example, a decline in private investment in computers and software following the economic downturn in 2008 led to significant revenue declines as businesses canceled or scaled back their software licenses. At the same time, firms have had to continuously adapt their software packages to keep pace with the rapid rate of technological change associated with microchip design, continues Boyland. One way firms have added new services to their repertoire is by acquiring smaller firms with specialized skill sets. As the industry has consolidated, the number of industry firms has decreased 2.9% per year on average over the five years to 2013.
The Electronic Design Automation Software Developers industry exhibits a moderate market share concentration. The top three firms are Synopsys, Cadence and Mentor Graphics. Concentration has increased over the past five years due to constant acquisition activity by the industry's three major players. Major industry acquisitions include Synopsys' 2012 purchases of Magma Design Automation and SpringSoft, and Cadence Design Systems' 2010 purchase of Denali Software. In 2008, Cadence offered to acquire its major competitor Mentor Graphics, but this offer was later withdrawn. Concentration is expected to continue increasing; the three major players will continue acquiring any smaller companies that are able to achieve a significant market share.
Over the five years to 2018, revenue is forecast to grow. The industry is anticipated to benefit from increasing microchip applications in consumer appliances and broadband-enabled smartphones and tablets. At the same time, firms will benefit from a greater number of electronics engineers using their product, as more engineers are needed to handle an increasingly complex chip design process. Many firms may move toward offering their services through the internet on a subscription basis to lower costs and improve profitability. For more information, visit IBISWorld’s Electronic Design Automation Software Developers in the US industry report page.
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IBISWorld industry Report Key Topics
Industry firms develop electronic design automation (EDA) software, which is used primarily for designing electronic components, such as printed circuit boards and integrated circuits.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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