In the third quarter of 2024, electronic systems design (ESD) industry revenue grew to $5.1 billion, an increase of 14.4% from $4,521.6 million in the third quarter of 2023. This growth reflects the continued strong performance of the electronic design automation (EDA) industry, particularly in the areas of computer-aided engineering (CAE), IC physical design and verification, printed circuit boards and multi-chip modules (PCB and MCM), and semiconductor intellectual property (SIP).
Key drivers of growth
Technological innovation:
New materials and new processes: With the continuous progress of semiconductor technology, the research and development and application of new semiconductor materials have brought new growth momentum to the electronics industry. For example, emerging technologies such as graphene transistors, self-organizing molecular devices, and carbon nanotubes can bypass the physical limitations of traditional semiconductor technologies, creating a wealth of opportunities for the IP semiconductor industry.
Artificial Intelligence and Machine Learning: Leverage massive amounts of data to optimize original designs with artificial intelligence and machine learning techniques to improve performance and reduce power consumption. For example, the EDA industry uses cloud computing to improve the computing power of the software itself, and uses massive storage resources in the cloud to achieve whole-process data integration and analysis.
Market Demand:
Consumer electronics: The electronics industry is growing rapidly due to increasing consumer demand for the performance and functionality of electronic products. For example, smartphones, laptops, and tablets run on dual- or quad-core processors and require efficient semiconductor intellectual property (SIP) to deliver error-free performance.
Industrial Internet of Things (IIoT): The rising trend of the Internet of Property (IIoT) is driving the growth of the semiconductor IP market. Semiconductor IP vendors develop reliable, scalable, and secure IIoT solutions that meet the evolving needs of industrial customers and drive digital transformation in the industrial sector.
Policy support:
Government encouragement: governments around the world have introduced policies to encourage the development and innovation of the electronics industry, and provide a good environment for the development of the electronics industry. For example, with the support of policies in China, the EDA industry has developed rapidly, and leading domestic EDA companies such as Empyrean have accelerated the full-process coverage of EDA tools in the field of design + manufacturing under the wave of independent controllability.
Figure: Electronic Systems Design Industry Growth: Revenue of $5.1 billion in the third quarter of 2024
Industry Cooperation:
Collaboration between semiconductor companies: Collaboration between semiconductor companies is increasing to improve efficiency and optimize product performance. For example, Synopsys has expanded its collaboration with Samsung Mint to develop a broad portfolio of IP to reduce design risk for automotive, mobile, high-performance computing (HPC) and multi-camera designs.
Market Trends:
Risk-free design: The industry is increasingly focusing on risk-free design to develop safer blocks for various sectors such as automotive and telecommunications. For example, Synopsys' collaboration with Samsung includes not only the underlying IP, but also USB, PCI Express, 112G Ethernet, UCIe, LPDDR, DDR, MIPI, and more.
Cloud computing and big data: Cloud computing improves the computing power of the software itself, and uses massive storage resources in the cloud to achieve whole-process data integration and analysis, and improve design efficiency.
Future outlook
With the continuous advancement of technological innovation, the continuous growth of market demand and the continuous strengthening of policy support, the electronic system design industry is expected to continue to maintain a strong growth momentum. In particular, with the integration and development of 5G, Internet of Things, artificial intelligence and other technologies, the electronic design automation (EDA) and semiconductor intellectual property (SIP) markets will usher in a broader space for development.
In summary, the significant growth in revenue of the electronic system design industry in the third quarter of 2024 is due to multiple driving factors such as technological innovation, market demand, policy support, and industry cooperation. In the future, with the continuous effect of these factors, the electronic system design industry will continue to maintain a good development trend.
