Steady Semiconductor & EDA revenue growth in Q3 2018

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Global semiconductor revenue growth moderated to 15.1% or $124.2 billion in Q3 2018 vs. Q3 2017 (SIA), following 20.5% & 20% growth in Q2 & Q1 2018 respectively. Gartner is forecasting 14.4% full year growth in semiconductor revenue to $481 billion for 2018.

Meanwhile, revenues in the EDA market grew steadily, with Synopsys growing quarterly revenues by 14.1% Q3* 2018 vs Q3* 2017 to $795.1M, while Cadence reported 9.7% growth to $532.5M:

For comparison, the % growth rates in the previous quarter, Q2* 2018 versus Q2* 2017 were Synopsys 12.1%, Cadence 8.2%, ESD Alliance 8.2% and semiconductor 20.5%.

Examining the delta in revenue growth in dollars, Synopsys and Cadence’s Q3* 2018 vs Q3* 2017 revenues increased by $98.5M and $47.1M respectively, surpassing their prior mid-point guidance by $6.2M and $17.5M respectively:

 

Guidance for the next quarter

The EDA companies’ own guidance (mid-point) for Q4* 2018 equates to percentage revenue growth as follows: Synopsys: 3.0% ($23.1M growth to $792.5M – transitioning to ASC 606 rules); Cadence 9.6% growth ($48.3M growth to $550M – according to ASC 606 reporting rules):

In summary, Q3 2018 global semiconductor revenue growth moderated to 15.1% or $124.2 Billion, while Synopsys revenues grew by 14.1% and Cadence by 9.7%. The EDA companies own guidance for Q4* 2018 is for more moderate growth: Synopsys to grow revenues by 3.0% and Cadence by 9.6%.

To subscribe to future quarterly EDA results updates, simply email: subscribe@edalics.com. The author, Gerry Byrne, is the founder of edalics, the only consultancy which benchmarks and reduces EDA budget costs for leading semiconductor companies. For more information about edalics services see other web pages of www.edalics.com

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

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