Demand for miniature electronic devices
Smartphones, tablets and laptops are the foundations of modern digital world. The evolution of telephones to landlines and to modern day mobile handsets (smartphones) equipped with custom made SoCs with PC processing capabilities can be attributed to the increasing demand for miniature devices. This requires EDA tools able to tackle the problems of high complexity to support 5G, liquid cooling while maintaining accuracy and precision. Tablets and laptops are further being designed to support 5G and cloud computing capabilities. These technological innovations are expected to drive the market growth during the forecast period.
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Increasing Demand for IoT Devices
The “Internet of Things” device sales are increasing enormously which is a major growth driving factor for the market. These devices are multipurpose as they can be used in a variety of applications. These IoT devices are deployed in industries to enhance the operational efficiency, which involves lot of customization and is application specific. EDA tools are vividly used to develop application-specific integrated circuits to fulfill industry needs.
Lack of Skilled Professionals
Lack of skilled professionals for effectively deploying these resources along with high cost of training the individuals to understand these EDA tools are some factors estimated to hinder the growth of the market.
Miniaturization, the aspiration to fit a supercomputer inside the palm of a human is revolutionizing the ICs and semiconductor chip designs. The need for EDA tools has grown over the years to deal with increasing complexity of IC designs, accuracy, precision and the effectiveness of semiconductor devices. With the increasing requirements for application-specific ICs which are capable of supporting cloud-based computing and AI, the EDA tools market is anticipated to record a significant CAGR during the forecast period of 2020-2028. On the basis of product, the market is segmented into CAD, VLSIs, semi-conductors and others, out of which, the leading share is estimated to be held by semiconductors segment. This can be attributed to increasing production of semiconductor-based SoCs and ICs in the market. The market is further segmented by application into design, simulation, analysis and verification and manufacturing. Among these segments, the design and manufacturing segments are estimated to be the largest revenue generating segments owing to the technological advancements in semiconductors SoCs and ICs, which is further predicted to contribute towards the growth of the segment.
Our in-depth analysis of the EDA market includes the following segments:
By End-user Industry
On the basis of regional analysis, the EDA market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. The market in North America is anticipated to hold the largest share on account of rising technological innovations along with presence of leading players in the region which develop and market electronic design automation tools. The technological progression and rising trend of “everything smart”, for instance, smart-homes and smart-cities in this region further increases the product demand. The market in Asia Pacific region is predicted to grow at the highest rate during the forecast period as a result of growth in digitalization, high smartphone and other IoT devices demand in the region, particularly in countries such as China, India and Japan.
The EDA market is further classified on the basis of region as follows:
On May 18, 2020, Synopsys, Inc., a U.S. based EDA tools manufacturer, announced a collaboration with Taiwan Semiconductor Manufacturing, which is a Taiwan based semiconductor manufacturing giant, to design HPC, Mobile, 5G and AI SoCs.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh