Electronic Design Automation Market, By Offering, By Deployment, By Tool, By End User: By Region - Market Size, Industry Dynamics, Opportunity Analysis and Forecast for 2024-2032

Global Electronic Design Automation Market Forecast till 2032: Set to Reach US$ 35.32 Billion by 2032 with a CAGR of 9.75%

Market Introduction:

The Global electronic design automation Market is experiencing robust expansion, valued at US$ 15.86 billion in 2023 and projected to grow at a CAGR of 9.75% from 2023 to 2032.

The global electronic design automation (EDA) market is a crucial sector within the broader field of electronics, playing an essential role in the design, simulation, and production of electronic systems and components. EDA tools are software tools and technologies used for designing electronic systems such as printed circuit boards (PCBs) and integrated circuits (ICs). These tools enable engineers and designers to visualize and manipulate the small, complex structures necessary for modern electronics, making them indispensable in the semiconductor industry.

Growth Influencers:

The Electronic Design Automation Market is experiencing growth due to the increasing. utilization of EDA tools for intricate automotive systems. This can be attributed to the intensifying competition among automotive manufacturers to incorporate cutting-edge technologies in their vehicles, particularly for electric vehicles. The automotive electronics industry is currently undergoing a substantial transformation with the widespread adoption of electric vehicles (EVs) and autonomous driving technologies. These advancements necessitate the development of advanced electronic systems, thereby driving the expansion of automotive electronics. EDA tools play a crucial role in designing the intricate electronic components and systems required for EVs and autonomous vehicles, thereby propelling the market's growth within the projected timeframe
Furthermore, the utilization of EDA tools is essential in the development, simulation, and validation of these intricate automotive systems. The exponential expansion of electric vehicles has presented novel obstacles in terms of design. EDA tools play a vital role in facilitating the design process of power electronics, battery management systems, motor control systems, and other components that are exclusive to electric vehicles. To meet the distinctive demands of EV designs, advanced EDA capabilities are necessary for optimizing power efficiency, range, and charging infrastructure. As a result, the EDA Market is experiencing significant growth within the projected time frame.

Electronic Design Automation (EDA) encompasses a collection of software, hardware, and vital services that are instrumental in the design of chips and semiconductor devices. As the demand for more potent and specialized chips escalates in sectors such as consumer electronics, automotive, and aerospace, the necessity for efficient EDA tools also increases. The complexity of chip design is simplified by EDA tools, which not only expedite the design process but also enhance its precision. This precision is vital as chip manufacturers continue to reduce transistor sizes, packing increasing power into diminishing spaces. EDA tools play a crucial role in ensuring the flawless operation of these miniaturized wonders.

Semiconductors serve as a pivotal technology that fosters innovation in a wide array of products spanning nearly all sectors of our economy. In 2022, the semiconductor industry hit a record high with chip sales amounting to $574.1 billion. However, due to the typical market cyclicality, there was an 8.2% drop in global revenue to $526.9 billion in 2023. Despite this, the industry saw steady increases in sales both monthly and annually in the latter half of the year, indicating the commencement of the current cycle. The resurgence in the second half of the previous year was driven by heightened sales in the automotive and industrial sectors, coupled with the escalating demand for a variety of chips integral to AI systems. The surge in sales to these sectors led to a shift in the distribution of global sales revenue across different end markets.

Segment Overview:

The electronic design automation market is categorized based on offering, deployment, tool, and end user.

By Offering

• Solutions
• Computer-aided Engineering (CAE)
• Semiconductor Intellectual Property (IP)
• PCB (Printed Circuit Board) and MCM (Multi-chip Module)
• IC Physical Design and Verification
• Services

By Deployment

• On-Cloud
• On-Premises

By Tool

• Simulation Tools
• Verification Tools
• Design Tools
• Ensuring Reliability (DFM) Tools

By End-User

• Automotive Industry
• Healthcare Industry
• Aerospace & Défense Industry
• Telecom and Data Centre Industry
• Consumer Electronics Industry
• Industrial Sector
• Others

The solution segment offers a variety of tools and software that automate different stages of designing electronic devices, including Computer-aided Engineering (CAE), Semiconductor Intellectual Property (IP), IC Physical Design and Verification, and PCB (Printed Circuit Board) and MCM (Multi-chip Module). Modern electronics pack more functionality into smaller sizes, requiring sophisticated design tools. Companies need to get products to market faster, and EDA tools help streamline the design process. EDA tools can help optimize designs for lower power usage. However, the service segment is expected to grow with a high CAGR, as it provides professional services to support the design process. Services include expertise in specific areas of electronic design. Helping companies integrate pre-designed IP blocks into their custom designs. Assisting with the physical layout and verification of chip designs. Providing training on EDA tools and ongoing support for customers. Companies can leverage service providers to accelerate the design process and get products to market faster.

The On-Premises Segment represents the traditional approach of deploying and operating EDA software within a company's own servers and IT infrastructure. Semiconductor firms, dealing with highly sensitive intellectual property (IP) in chip designs, value on-premises solutions for the heightened control they offer over data security, ensuring data remains within their infrastructure. High-performance EDA tools often demand substantial computing power, and on-premises solutions enable companies to tailor hardware for optimal performance. Given substantial existing investments in on-premises infrastructure, many firms may hesitate to transition to cloud-based models. Cloud-based EDA, or Software-as-a-Service (SaaS), delivers EDA tools via the internet. Such solutions negate the need for upfront investments in hardware and software, trimming IT costs. Cloud resources are adaptable, scaling based on demand, thus offering superior flexibility compared to on-premises setups. Moreover, accessibility from any location with internet connectivity streamlines collaboration for remote design teams.

The simulation tools segment is very crucial in the design process that even though it's dominant, there's still immense potential for further growth. Constant innovation in areas like real-time simulation, integration with AI/ML for more accurate modeling, and broader application across different design stages could fuel further market expansion. As electronic devices become more intricate, the need for robust simulation tools to analyze their performance, power consumption, and signal integrity becomes even more critical. The miniaturization of electronic devices has led to a surge in the need for sophisticated simulation tools for their design. The rise of the Internet of Things (IoT) and interconnected devices has created a necessity for advanced design solutions, thereby fueling the demand for Electronic Design Automation (EDA) tools. The widespread application of System on Chip (SoC) technology in various sectors, including automotive, IoT, and AI, is believed to be a key driver of the market. Furthermore, the escalating use of Field-Programmable Gate Arrays (FPGAs) in data centers is propelling the demand for EDA tools.

The ever-evolving world of smartphones, wearables, and smart home devices requires constant design innovation, potentially making it a strong contender for dominance. The increasing role of electronics in autonomous vehicles and advanced driver-assistance systems (ADAS) could be another high-growth segment. The ever-increasing demand for data storage, processing, and transmission necessitates the development of more efficient and powerful telecom and data center infrastructure. This could lead to such a surge in EDA usage that it remains dominant and experiences high growth. The rollout of 5G and development of future generations of wireless communication technologies require advanced chip designs, driving growth in the EDA tools used for those applications. The growth of cloud computing necessitates powerful and efficient data centers, requiring advanced EDA tools for chip design. The need for faster data transmission speeds within data centers and telecom networks drives the need for advanced chip designs, influencing the EDA market. The increasing use of AI in data centers and telecom networks for tasks like network optimization will require specialized chip designs, further impacting the EDA market.

Regional Overview:

Based on Region, the market is divided into North America, Europe, Asia Pacific, Middle East and Africa, and South America.

• North America
• The U.S.
• Canada
• Mexico
• Europe
• Western Europe
• The UK
• Germany
• France
• Italy
• Spain
• Rest of Western Europe
• Eastern Europe
• Poland
• Russia
• Rest of Eastern Europe
• Asia Pacific
• China
• India
• Japan
• Australia & New Zealand
• South Korea
• ASEAN
• Rest of Asia Pacific
• Middle East & Africa (MEA)
• Saudi Arabia
• South Africa
• UAE
• Rest of MEA
• South America
• Argentina
• Brazil
• Rest of South America

North America houses major semiconductor companies and electronic design houses, driving demand for advanced EDA tools. Significant investments in research and development for new technologies create a fertile ground for EDA innovation and adoption. Consumers in North America have a higher willingness to spend on electronics, further stimulating the demand for advanced EDA tools.

The Asia Pacific region, particularly China, is a major hub for electronics manufacturing. This creates a significant demand for EDA tools to design and manufacture these devices. Many Asian governments are investing heavily in their domestic semiconductor industries, fostering growth in the EDA market. Countries like China are aiming to reduce their reliance on imported semiconductors, which will require them to invest heavily in domestic EDA capabilities. Multinational companies are increasingly setting up R&D centers in Asia Pacific, leading to a rise in demand for advanced EDA tools. The region boasts a large pool of skilled engineers, making it an attractive location for EDA companies to invest.

Competitive Landscape:

The Electronic Design Automation market is characterized by a vigorous competitive landscape, with prominent entities like Synopsys, Inc., Cadence Design Systems, Inc., Siemens AG, Keysight Technologies, Inc., ANSYS, Inc. and Zuken Inc. at the forefront, collectively accounting for approximately 63% of the overall market share. This competitive milieu is fueled by their intensive efforts in research and development as well as strategic partnerships and collaborations, underscoring their commitment to solidifying market presence and diversifying their offerings. The primary competitive factors include pricing, product caliber, and technological innovation. As the Electronic Design Automation industry continues to expand, the competitive fervor among these key players is anticipated to intensify. The impetus for ongoing innovation and alignment with evolving customer preferences and stringent regulations is high. The industry's fluidity anticipates an uptick in novel innovations and strategic growth tactics from these leading corporations, which in turn propels the sector's comprehensive growth and transformation.

Report Insights:

• The global EDA market is projected to grow from US$ 15.86 billion in 2023 to US$ 35.32 billion by 2032, at a CAGR of 9.75%.
• There is a notable shift towards cloud-based EDA solutions, offering enhanced scalability and cost efficiency over traditional on-premises deployments.
• The service segment within the EDA market is expected to grow at a high CAGR, driven by the demand for specialized design and consultation services.
• Asia Pacific, led by China and India, is a rapidly growing region in the EDA market due to its burgeoning electronics manufacturing sector and investments in semiconductor production.

Questions to be Answered:

• What is the estimated growth rate of the electronic design automation market?
• What are the key drivers and potential restraints?
• Which market segments are expected to witness significant growth?
• Who are the leading players in the market?