Global semiconductor revenues grew only slightly by 0.6% to $114.7 billion in Q4 2018 vs. Q4 2017 (SIA), but were 8.2% less than in Q3 2018, following double digit % growth in previous quarters of 2018. Gartner is forecasting 14.4% full year growth in semiconductor revenue to $481 billion for 2018.
Despite slowing semiconductor revenue growth, revenues in the EDA market grew steadily, with Synopsys growing quarterly revenues by 6.6% Q4* 2018 vs Q4* 2017 to $820.4M, while Cadence reported 13.6% growth to $569.9M:
For comparison, the % growth rates in the previous quarter, Q3* 2018 versus Q3* 2017 were Synopsys 14.1%, Cadence 9.7%, ESD Alliance 7.7% and semiconductor 15.1%.
Examining the delta in revenue growth in dollars, Synopsys and Cadence’s Q4* 2018 vs Q4* 2017 revenues increased by $51M and $68.1M respectively, surpassing their prior mid-point guidance by $27.9M and $19.8M respectively:
Guidance for the next quarter
The EDA companies’ own guidance (mid-point) for Q1* 2019 equates to percentage revenue growth as follows: Synopsys: 6.8% ($53.2M growth to $830M – transitioning to ASC 606 rules); Cadence 10.2% growth ($52.7M growth to $570M – according to ASC 606 reporting rules):
In summary, Q4 2018 global semiconductor revenue growth moderated to 0.6% or $114.7 Billion, while Synopsys revenues grew by 6.6% and Cadence by 13.6%. The EDA companies own guidance for Q1* 2019 is for continued moderate growth: Synopsys to grow revenues by 6.8% and Cadence by 10.2%, despite a downward trajectory in Semiconductor revenues.
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* Based on each company’s reported financial quarterly data which most closely match that calendar quarter.