REDWOOD CITY, CA — Sales of software for printed circuit board and multichip module design jumped 13.8% year-over-year to $193.4 million during the first quarter, according to data released today by the Electronic System Design (ESD) Alliance Market Statistics Service.
The four-quarters moving average for PCB and MCM, which compares the most recent four quarters to the prior four quarters, increased 10.7%.
Overall electronic design automation (EDA) revenue increased 7.8% to $2.31 billion. The four-quarters moving average increased 9.1%.
“It really was a great quarter,” said Wally Rhines, ESDA spokesman and president of Mentor. “We are stacking one on top of another,” he told PCD&F.
The industry ran its streak of consecutive growth quarters to nine, and posted the eighth straight positive first quarter. The record for the consecutive quarters of growth is 23, from the first quarter of 2010 to the third quarter of 2015, according to Merlyn Brunken, director of market intelligence, Mentor.
Rhines noted the gains were broad-based, led by PCB design, IC physical design and verification. IC layout was up 19% year-over-year, and semiconductor intellectual property was near 20% for the reporting companies. (Due to weakness among nonreporting companies, overall SIP revenue was up 5.1%.) Computer-aided engineering (CAE) revenue was up 2.4% to $699.7 million. Services revenue increased 9.7% to $112.5 million.
The Americas, EDA’s largest region, purchased $1.02 billion worth of EDA products and services, up 8.4 % Sales in Europe, the Middle East, and Africa (EMEA) increased 12.4 % to $336.4 million. Japan was up 5.8 % to $248.1 million, and Asia/Pacific revenue increased 5.4% to $699.9 million.
North America’s results were “really, really strong,” added Rhines. “And Europe was particularly strong this time, and in areas you don’t expect. PCB was up double-digits, which is encouraging because it’s driven by systems companies.”
Asked if there’s more room to run, Rhines expressed optimism. “This takeoff is relatively new. In 2015-16 we were growing 0.5% a year. The average of the previous six years was 3%. There’s reason to believe we are at the beginning, not the end” of a cycle.
He pointed to hundreds of billions of dollars in new investment coming online in semiconductor technology, particularly from venture capital investments in fabless IC design startups. “It’s a very healthy period,” he said.
Also noteworthy was the increase in staffing levels. Companies that were tracked employed 41,110 professionals in the quarter, up 10.4% from 2017. “Employment in EDA almost always grows, but has been growing faster than revenue in recent years,” Rhines said. “You’d expect you’d see the effect on profitability but you haven’t. It says to me EDA is becoming more efficient, although it’s probably not a sustainable trend over the long term. “Also, all regions are growing employment. The majority of that comes from US based companies that are hiring around the world.”
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