Design Tool Growth Propels IP Market Forward

The Electronic System Design (ESD) industry experienced a substantial revenue increase of 14.4% in the first quarter of 2024, reaching $4,521.6 million compared to $3,951.1 million in the same period of 2023. This growth trend is highlighted in the latest report from the ESD Alliance, a Technology Community within the SEMI trade organization.

One of the notable findings in the report is the 18.6% increase in Semiconductor Intellectual Property (IP) revenue, which reached $1,578.1 million. This surge brings the IP revenues closer to those of Computer-Aided Engineering, indicating a significant shift in the market dynamics within the ESD industry.

The ESD Alliance's Electronic Design Market Data (EDMD) report also sheds light on the performance of different regions. In Europe, Middle East, and Africa (EMEA), the procurement of electronic system design products and services totaled $579.0 million in Q1 2024, marking a 9.2% increase. The four-quarter moving average for EMEA showed a robust growth rate of 14.6%.

According to Walden C. Rhines, Executive Sponsor of the SEMI Electronic Design Market Data report, "The electronic design automation (EDA) industry continued to report strong revenue growth in Q1 2024." Rhines further noted that all product categories, including CAE, IC Physical, Semiconductor IP, and Services, experienced double-digit upticks in revenue. Moreover, all geographic regions, particularly the Americas and Asia Pacific, reported double-digit revenue gains, indicating a widespread industry expansion.

The companies tracked in the EDMD report collectively employed 61,653 people globally in Q1 2024, reflecting a 6.9% increase over the previous year. This growth in employment signifies a positive outlook for the industry and its potential for further expansion and innovation.

In terms of regional performance, the Americas emerged as the largest reporting region by revenue, with $1,937.2 million in electronic system design product and service procurement in Q1 2024, representing a 14.1% increase. The four-quarter moving average for the Americas also showed a notable rise of 12.1%, indicating sustained growth in the region.

Japan's procurement of electronic system design products and services experienced a 2.8% growth, reaching $280.7 million in Q1 2024. The four-quarter moving average for Japan increased by 8.9%, demonstrating a positive trajectory for the country's ESD industry.

Asia Pacific (APAC) emerged as a significant player in the global ESD market, with $1,724.7 million in procurement of electronic system design products and services in Q1 2024, marking a substantial 19% increase. The four-quarter moving average for APAC also showed robust growth at 19.2%, underscoring the region's growing importance in the industry.