Global semiconductor revenue growth accelerated again to 18.1% during Q1 2017 vs. Q1 2016 (SIA), following 12.3% growth in Q4 2016. There’s more good growth forecast in the Semiconductor market, with increases in both DRAM and NAND pricing and Gartner raising its 2017 growth forecast to 12% (from a previous 7.2%).

This robust semiconductor industry performance is reflected more modestly in the Q1 2017 quarterly EDA results. Synopsys grew revenues by 12.4% Q1* 2017 vs Q1* 2016, while Cadence reported steady consistent 6.5% growth:

Semiconductor & EDA market revenues grew strongly in Q1 2017-eda-revenue-q1-2017-jpg

For comparison, the % growth rates in the previous quarter, Q4* 2016 versus Q4* 2015: Synopsys 14.8%, Cadence 6.3%, ESD Alliance 18.9% and semiconductor revenues 12.3%.

Examining the delta in revenue growth in dollars, Synopsys and Cadence's Q1* 2017 vs Q1* 2016 revenues increased by $75.1M and $29.0M respectively. Synopsys and Cadence surpassed their own mid-point revenue guidance for the quarter by $7.6M and $1.9M respectively:

Semiconductor & EDA market revenues grew strongly in Q1 2017-eda-revenue-2017-jpg

Guidance for the current quarter

The EDA companies’ own guidance (mid-point) for Q2* 2017 equates to percentage revenue growth as follows: Synopsys: 12.6% ($77.3M growth to $692.5M); Cadence 4.9% growth ($22.0M growth to $475M):

Semiconductor & EDA market revenues grew strongly in Q1 2017-synopsys-cadence-revenue-q1-2017-jpg

In summary, Q1 2017 global semiconductor revenue grew very strongly to a new all-time record for the first quarter of the year at $92.6 billion, up 18.1% versus Q1 2016, while Synopsys and Cadence achieved 12.6% and 6.5% growth rates respectively. The EDA companies own guidance for Q2* 2017 is for Synopsys to grow revenues 2.5 times faster than Cadence (at 12.6% versus 4.9% growth rates respectively).

The author, Gerry Byrne is the founder of edalics, the only independent EDA Budget Management advisor to leading semiconductor companies.

To schedule a meeting with Gerry at DAC in Austin, June 18-22, simply email: Gerry.Byrne@edalics.com.

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