Q2 2017 delivered strong semiconductor and steady EDA growth

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Global semiconductor revenue hit a new record high of $97.9 billion in Q2 2017, growing strongly by 23.7% vs. Q2 2016 (SIA), following an already strong 18.1% growth in Q1 2017. In July, Gartner raised its forecast for 2017 semiconductor revenue growth once more to 16.8% (from prior forecasts of 12% and 7.2%), to $401.4 Billion.

This very strong 23.7% semiconductor industry performance far outpaced the Q2 2017 quarterly EDA results. Synopsys grew revenues by 13.0% Q2* 2017 vs Q2* 2016, while Cadence reported 5.7% growth:

For comparison, the % growth rates in the previous quarter, Q1* 2017 versus Q1* 2016 were Synopsys 12.4%, Cadence 6.5%, ESD Alliance 10.5% and semiconductor revenues 18.1%.

Examining the delta in revenue growth in dollars, Synopsys and Cadence’s Q2* 2017 vs Q2* 2016 revenues increased by $80.2M and $26.0M respectively. Synopsys and Cadence surpassed their own mid-point revenue guidance for the quarter by $2.9M and $4.0M respectively:

Guidance for the next quarter

The EDA companies’ own guidance (mid-point) for Q3* 2017 equates to percentage revenue growth as follows: Synopsys: 2.5% ($15.8M growth to $649.5M); Cadence 7.6% growth ($33.8M growth to $480.0M):

In summary, Q2 2017 global semiconductor revenue grew very strongly by 23.5% to a new all-time record of $97.9 Billion, while EDA revenues grew more moderately: Synopsys grew by 13.0% and Cadence by 5.7%. The EDA companies own guidance for Q3* 2017 is for Synopsys to grow revenues by 2.5% and Cadence by 7.6%.

These charts are an extract from edalics’ quarterly EDA Market Executive Briefing, which provides a deeper analysis of product segment revenues, exploring the reasons behind and implications of quarterly revenue trends. It provides a comprehensive, but concise quarterly summary of EDA market news and statistics for all managers with EDA budget responsibility, whether in Engineering, Purchasing or Finance departments. For more details see: EDA Market Executive Briefing

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*Based on each company’s reported financial quarterly data which most closely match that calendar quarter.