Industry Insights
The U.S. electronic design automation (EDA) software market was valued at USD 2.76 billion in 2017 and is expected to grow at a lucrative growth during the forecast period from 2018 to 2025 The growth is primarily driven by the rising number of players integrating smart devices such as smartphones, telemetry devices, electrocardiogram, wireless communication equipment, automotive body electronics and other devices with system-on-chip (SoC) technology. Development of System-in-Package technology has allowed mixed-signal SoC providers to offer single chip offering various functions at cost effective prices.
U.S. electronic design automation software market revenue, by end use, 2015 - 2025 (USD Billion)
Rapid adoption of SoC is majorly expected to drive the demand for electronic design automation software market over the study period. Increasing demand for semiconductor devices is expected to rise in next few years enabling rapid penetration of SoC technology in the market which in turn will increase the demand for electronic design automation (EDA) over the next few years. EDA enables chip designing as per specific requirements which is the most essential part in the semiconductor industry. Hence, growing demand from semiconductor industry is expected to propel the market over the forecast period.
The U.S. contributes majority of the stake in the global electronic design automation market pertaining to presence of large number of small and medium vendors in the market. presence of silicon valley in the Los Angeles is expected to create adequate demand for EDA over the forecast period. Additionally, growing number of angel investors in the region is expected to drive the market over the study period.
Adoption of FinFET architecture at a rapid pace is expected to fuel the demand for EDA over the forecast period. Moreover, growing demand for smartphones, tablets and PDA is expected to fuel the EDA market over the forecast period. Shift of preferences of chip manufacturers to FinFET architecture from planar FET designs is expected to increase the demand for designing tools such as electronic design automation softwares.
FinFET offers faster operations and minimal consumption of dynamic power compared to FET. Lucrative growth of 3d semiconductor industry is expected to increase adotption of FinFET which in turn is expected to drive the demand over the study period. The softwares used in designing must be compliant with standards including BS EN 62014-1, which is first part of EDA libraries and IEC/TR 62014-3 which explains the modles of integrated circuits.
Key players in the market adhere to these standards in order to provide optimum solutions to the end users. EDA tools enbles develoment and desgning of complicated large scale circuits which are later used in all industries. These softwares enable designers to perform accurate and provide highly efficient designs in minimal time. The softwares also offer virtual testing of designs which saves additional time.
Lucrative growth of electronics industry in the U.S. is expected to drive the market for electronic design automation softwares over the forecast period. Product innovation such as wireless electronics such as speakers, headphones and many more are already gaining populartiy and are expected to do so in near future. Highly dynamic nature of the electronics market has resulted in entry of various new products in the market where EDA comes into picture. The consumer electronics industry in the U.S. is expected to grow at a year on year growth rate of 1-2% over the next few years.
Consistent developments and upgradations in the electronic industry is expected to drive the demand for Electronic Design Automation Software market. Trends such as product design outsourcing, introduction of virtual reality, robotics & automation, smart televisions and rapid penetration of IoT in smart house hold appliances is expected to drive the demand for EDA softwares over the projection period. Within the U.S., penetration of smart appliances was 14.2% in 2018 and is expected to reach 28.6% by 2022.Furthermore, increased sales of smart televisions within the U.S. is expected to drive the demand for EDA software in coming years. In January 2017, 29% of homes in U.S. now have smart televisions which was 22% in January 2016.
Segmentation by Type
• Verification
• Simulation
• Design Software
The design software is expected to emerge as a lucrative segment and is anticipated to grow at an average growth rate of 5.6% from 2015-2025 as designing is the first step involved in manufacturing of circuits. Design software is essential in product development as well as testing of existing products. Design software involves processes such as PCB design, IC fabrication, logic synthesis and many more processes.
In 2017, verification software dominated the U.S. market by contributing over 36% of the market share and is expected to maintain its dominance by 2025. Lucrative demand for designing of PCB’s results in their verification for algorithm and working. Increasing complications in designing of circuit boards is expected to fuel the demand for verification software on account of its high accuracy and time reducing characteristics.
Introduction of upcoming electronics geared with latest technology is expected to drive the demand for design software over the forecast period. The simulation segment is expected to grow at a lucrative rate attributed to its ability to provide efficient results in minimal time frame. Simulation helps to find bugs in the given circuit and allows real time correction of the bug.
Segmentation by End Use
• Microprocessors & Controllers
• MMU
• Others
The microprocessors & Controllers segment dominated the U.S. market by contributing over 70% in 2017 and is expected to emerge as most lucrative segment compared to its counterparts. The microprocessors & controllers segment is expected to grow at an average growth rate of 5.7% from 2015-2025. The growth is attributed by large variety of applications of EDA software. Products such as televisions, traffic lights, desktops & laptops use controllers & microprocessors. Lucrative growth of consumer electronics market in the U.S. is expected to propel the demand for microprocessors & controllers over the study period.
Competitive landscape
The U.S. market for EDA software is consolidated in nature. Four major players namely Cadence Design Systems, Synopsys Inc., ANSYS, Inc., and Mentor Graphics contribute over 65% of the market share. Furthermore, the market is also marked by presence of several small domestic players.
Lack of product differentiation and low capital requirements is expected to render lucrative opportunities for the new entrants. The key players are concentrating on developing highly accurate software’s which will in turn provide accurate designs.
