Commentary: EDA Industry Update – July 2010 What did nominal Q1 2010 Bring?


EDA Industry Update – July 2010

What did nominal Q1 2010 Bring?

by Dr. Russ Henke
Henke Associates


Attention Loyal Readers of the Electronics IP Industry & the EDA Industry Commentaries presented here quarterly since 2003:

Don’t worry – they aren’t going away! They will each continue to appear quarterly, but the latest EDA and IP information will be combined into one quarterly document that will be published as part of the EDA WEEKLY collection. The first edition in this new format will appear in late December 2010 or early January 2011, cleverly entitled, "EDA & IP Industry Commentary for Q3 2010." Subsequent EDA and IP information will likewise appear each subsequent quarter in this fashion.

Content-continuity with previously-posted IP and EDA data will be fully preserved, as follows:

  • The last stand-alone Electronics IP Industry Commentary for August 2010 covered the G5 IP vendor revenue & earnings results, etc., for Q2 2010.

  • The last stand-alone EDA Industry Commentary for July 2010 covered the G5 EDA vendor revenue & earnings for nominal Q1 2010.

  • Subsequently, the G5 EDA vendor revenue & earnings for nominal Q2 2010 were contained in the EDA WEEKLY issue of September 13, 2010, entitled, "Whither EDA?"

  • All previous Commentaries and EDA WEEKLIES, including those referred to above, are immediately available to readers by clicking on the “Archived Commentaries” or “Archived Weeklies” URL’s that appear in their respective identity boxes on the main front page of

In each of the 28 quarterly EDA Industry Commentaries published in since May 2003 by Henke Associates, the then-current yearly and quarterly financial performances of a selected group of publicly traded Electronic Design Automation (EDA) companies were analyzed and compared. Expectations regarding the future financial performances of these same EDA entities were documented as well. The originally selected companies were Altium, Ansoft, Cadence, Magma, Mentor Graphics, Nassda, Synopsys, Synplicity and Verisity.

As part of continuing EDA industry consolidation, two previously-selected EDA vendors, namely Verisity and Nassda, had been acquired by EDA vendors Cadence and Synopsys, respectively, and hence were dropped from the quarterly EDA Commentaries. More recently, EDA vendor Synplicity was acquired by Synopsys, and EDA vendor Ansoft was acquired by MCAE vendor ANSYS. Consequently, both Synplicity and Ansoft no longer independently appear in these EDA Industry reports.

This July 2010 EDA Industry Commentary covers (for the nominal First Quarter [1] of 2010) the performances of the remaining group of five (G5) EDA vendors: Altium, Cadence, Magma, Mentor Graphics, and Synopsys. The timing of the publication of these quarterly commentaries is usually governed by the official financial news release of the last G5 vendor reporting; this time Mentor Graphics was the last to report.

EDA News Highlights are preceded by the revenue & earnings performances of the selected group of EDA players for nominal Q1 2010, and then EDA vendor by vendor Q1 financial details. When available, these details include individual EDA vendor forecasts for nominal Q2 2010. EDA Vendor stock prices are discussed. Finally, some fresh “July 01” Semiconductor Industry Association and EDA Consortium stats are included if they have been released by press time.

The G5 EDA vendors covered here are:

[1] See footnotes at end of the EDA COMMENTARY.

The text below is divided into these major categories:

How'd the EDA G5 fair during the 1st Quarter of 2010?

Vendor by Vendor Q1 2010 details

General News that affects the Economy

Recent EDA Industry News Highlights

EDA Big 3 vs. MCAD Top 3 Vendors Q1 2010

EDA Vendor Q1 2010 Stock Performances

EDA Vendor Q2 2010 Stock Performances

How'd the EDA G5 fair during the 1st Quarter of 2010?

The combined G5 revenue total of $785.5 million for nominal Q1 2010 barely edged the $781 million for Q1 2009, by less than 1%. Both Cadence and Synopsys were up, but Mentor and Magma were down. See Table 1.

As is quite natural, nominal Q1 2010 combined G5 revenue was less than the sequential combined total in Q4 2009, but this time Mentor was primarily responsible, with its Q1 2010 revenue off by -24% from a monster Q4 2009 revenue result.

Considering earnings in Table 2, Q1 2010 found that three of the four EDA Vendors reporting had slipped into red ink on a GAAP basis, with only Synopsys' consistent profitability keeping the G4 total Q1 2010 net income barely into black ink. But hey, what's a sequential negative difference like Q4 2009 to Q1 2010 of $167.29 million in quarter-to-quarter profit mean among friends? It means that the G4 total profit of $4.07 million in Q1 2010 was $167.29 million worse than the $171.36 million total G4 profit in the just prior Q4 2009! On the other hand, Q1 2010's G4 total profit of $4.07 million was an improvement of $41.89 million over the G4 total loss of $37.82 million in Q1 2009 (i.e. year over year).

Last year in Q1, the same three vendors were also in red ink, but even Synopsys' Q1 2009 profit of over $48 million could not offset the losses among the other three back then, especially Cadence's $63 million Q1 2009 net loss.

Vendor by Vendor Q1 2010 details

On April 14 2010 Altium Limited (ASX: ALU) reported sales and revenue results for nominal Q1 2010, the quarter ending March 31, 2010.

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Review Article
  • Always interesting. July 09, 2010
    Reviewed by 'S. Lee Ryan'
    I have workd with Dr. Henke in the past and will say he was most helpful and insightful as well as practical in his knowledge. I look forward to reading his articles here very much. Thanks, Russ

      3 of 3 found this review helpful.
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