Electronic Design Automation (EDA) Software Market

Market Overview

The global electronic design automation software market size was valued at USD 11.94 billion in 2021, envisioned to reach USD 25.58 billion, growing at a CAGR of 9.9% during the forecast period.

Electronic Design Automation (EDA) software comprises various methods and applications required to design the next generation's complicated semiconductor and electronics goods. Electronic design automation (EDA) software is utilized in the designing and verifying of integrated circuits (ICs), printed circuit boards (PCBs), and electronic systems. The semiconductor business is strongly connected to the EDA software market. EDA tools are utilized throughout designing and validating the manufacturing process for semiconductors to guarantee that it achieves the desired levels of performance and density. ECAD software is another name for EDA software.

The significant factors that are primarily driving the growth of the electronic design automation software market include an increase in the significance of EDA in the electrical design processes, advancements in system-on-chip (SoC) technology, and a spike in the adoption of modern technologies such as the internet of things and artificial intelligence. However, the availability of open-source EDA software and the risk of cyberattacks is anticipated to impede the growth of the EDA market. In contrast, the increase in demand for small electronic devices and machine learning in EDA is expected to create profitable growth prospects in the following years.

Market Dynamics

Global EDA Software Market Drivers

• The Increasing Use of FinFET Architecture for Modern Processors Designing

FinFET is the most promising technology for extending Moore's law to 5 nm. It provides reasonable solutions to the issues of sub-threshold leakage, poor short-channel electrostatic activity, and excessive device parameter variability that plagued planar CMOS as it shrunk to 20 nm. FinFET parasitic extraction accuracy is challenging. FinFET design extends the design window. FinFET architecture can benefit from EDA software encompassing process development, spice design implementation, and intellectual property. EDA solution assists in handling new issues, such as double-patterning and 3D transistors, brought about by 20nm planar and 16/14nm and below FinFET manufacturing standards with 3D-IC integration.

In addition, it allows for quick RTL design exploration and block feasibility analysis, physical assistance from synthesis to place and route, in-design physical confirmation with automatic recognition and repair of complicated design guidelines, tightly linked extraction and signoff functionality with implementation tools, leakage recovery capabilities from signoff analysis, and more. Consequently, these benefits of EDA software for FinFET architecture are anticipated to propel the electronic design automation software market.

• Developments in System on Chip (SoC)

A system-on-chip (SOC) design is an integrated circuit that incorporates a processing engine, memory, and logic onto a single chip. System on a Chip (SoC) advancements also contribute to the expansion of the semiconductor IP business. Increasing programmable component complexity necessitates the development of novel design strategies. While CPU models and SoCs have been for some time, new design techniques are being developed to tackle restrictions like slower simulation speeds, less validation support, synthesis issues, and limited architectural modeling capabilities. The standard practice for defining processor architecture is increasing the abstraction level. Due to the demand for modeling activities, market suppliers are presenting unique design techniques, which is advantageous for the electronic design automation software market's growth.

Global EDA Software Market Restraints

• The Presence of Open-Source EDA Software

There is also an abundance of free EDA software that is not licensed under the GPL (General Public License). V2000 is a new project that aims to provide a free Verilog-AMS simulator that will likely not be licensed under the GPL. Berkeley provides EDA tools with its license arrangement. Other GPL-licensed software includes, among others, the Voyeur visualization tool, the Vaul VHDL analyzer, the Simsynch digital simulator, the Thud RTL simulator, and the Veripool Verilog waveform viewer. This abundance of free and open-source EDA software is anticipated to impede the global EDA software market's expansion.

Global EDA Software Market Opportunities

• The Increased Demand for Compact Electronic Devices

To accelerate the design process, the market is in a perpetual state of evolution. As manufacturing techniques reduce in size, ICs become proportionally more complicated, and as any design engineer knows, complexity lengthens the design process. This is true regardless of the kind of design, whether individual transistors or integrated transistors are used. Conveniently for IC design engineers, the process of developing at the transistor level adheres to highly rigid and somewhat predictable laws. A component of complexity is the interdependence between design parameters. As a result, EDA software is projected to be more utilized in the following years to meet the demand for miniaturized electronic devices, which leads to a complicated design process.

Regional Analysis

The region-wise segmentation of the global electronic design automation software market includes North America, Europe, Asia-Pacific, and LAMEA.

• Why is the Asia Pacific projected to be the most lucrative market during the assessment period?

The Asia Pacific will command the market with the largest share while growing at a CAGR of 11.9%. Because of an upsurge in the percentage of activities about the development of communication infrastructure in the Asia-Pacific region, it is anticipated that industries based in the region, such as industrial, communication, and consumer electronics, will have a high demand for electronic design automation software. In addition, businesses in the logistics and transportation industries in Asia-Pacific are adopting new technologies with constantly evolving networks like the Internet of Things (IoT), 4G, and 5G networks to meet the increasing demands of their customers, accommodate more significant levels of customization, and maximize both convenience and security. 

The most important factor contributing to the expansion of the electronic design automation software industry is the technology's potential to lower the cost of communication. Other contributing factors include increased demand for consumer electronics and extensive penetration of smartphones. Furthermore, government measures to support the manufacturing industry are anticipated to further fuel the global electronic design automation software market growth in India, Japan, and the rest of the Asia-Pacific countries.

North America will hold USD 9 billion, growing at a CAGR of 7.6%. Because of its highly established IT infrastructure, North America has emerged as a leader in technological innovation. The United States' contemporary businesses are increasingly using automated technologies to simplify and improve their operational procedures. In addition, industries in North America are employing EDA, which helps firms profit from extensive commercial coverage that is significantly larger than that is supplied by manual design procedures. This significant component is anticipated to drive North America's electronic design automation software market expansion. In addition, the number of market players in North America, and leading vendors in the electronic design automation software market, such as Synopsys and Altair, is the highest of any region in the world.

Segmental Analysis

The global electronic design automation software market is classified based on type, application, and region.

By Type Analysis

Based on type, the fragments include computer-aided engineering (CAE), IC physical design and verification, printed circuit board and multi-chip module (PCB and MCM), semiconductor intellectual property (SIP), and services.

The semiconductor intellectual property (SIP) segment is projected to advance at a CAGR of 8.9% and hold the largest market share. SIP typically consists of a reusable design or testbench module. Often referred to as a virtual component. IP is a vast category of legally recognized textual and electronic material belonging to a single entity. In electronics, intellectual property refers to elements of a chip or "building blocks" that may represent the company's exclusive or patented ideas. EDA software for SIP tools includes IP-based SoC design options. The typical SIP portfolio consists of logic libraries, embedded memory, analog IP, wired and wireless interface IP, security IP, embedded processors, and subsystems.

The computer-aided engineering (CAE) segment will hold the second-largest share. CAE tools include electronic system-level (ESL) design, synthesis, and verification, textual and graphical design entry tools, logic verification, formal verification like equivalency checking and property checking, analytical tools, design-for-test, automated test tools, and synthesis tools. The combination of smaller feature sizes improved packing density, longer connector length, and faster clock rates has presented engineers designing increased digital and analog systems with new hurdles. CAE tools facilitate extraction, modeling, electromagnetic, and signal integrity evaluation solutions for today's design difficulties.

By Application Analysis

Based on application, the fragments include communication, consumer electronics, automotive, industrial, and aerospace & defense, medical, and others.

• The consumer electronics segment held the dominant share of the market

The consumer electronics segment is projected to advance at a CAGR of 9.3% and hold the largest market share. Consumer electronics is one of the key market sectors for EDA software. Consumer electronics include various electronic products, including intelligent wearables, cameras, video players, tv, radios, and air conditioners. From digital cameras to portable media players, the consumer electronics market is transforming how we share and communicate digital media. As the promise of digital convergence raises customer expectations for devices with nearly all functions at a lower price, device designers are compelled to address the issues of a decreased bill of materials (BOM), integration efforts, and power consumption in increasingly complex systems. Consequently, using Electronic Design Automation Software devices is anticipated to stimulate market expansion in the future.

The communication segment will hold the second-largest share. The communication industry makes extensive use of electronic design automation software and services, and it is anticipated that communications capabilities will continue to be enhanced, along with all levels of preparedness and coordination. For complicated communication protocols, VHDL-based (Very High-Speed Integrated Circuit) FPGA (Field Programmable Gate Arrays) programming is efficient, versatile, and readily adaptable to standard upgrades. In reality, the large capacity, high speed, and excellent performance development trend of FPGAs are intended to suit the requirements of applications in the communications industry. Additionally, EDA software facilitates the design of 5G mobile phones. Numerous industry leaders provide 5G mobile phones with a portfolio of interface IP, data converter IP, security IP, and a variety of CPU options.

Recent Developments

• In 2022, Samsung will adopt ANSYS, Inc.'s advanced capacity, speed and integration capabilities to develop ultramodern designs. 
• In 2022, ANSYS, Inc., and TSMC will collaborate on the TSMC N6RD design reference flow. 
• In 2022, ANSYS, Inc. acquired Motor Design Limited.