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Meltdown burns electronic design sales

Jobs hold steady (for now)

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The trade group that follows the electronic design automation (EDA) industry says that revenues among the key industry players have continued to slide through 2008. As you might expect. But ironically - and thankfully, if you happen to work in this field - jobs have held up, at least on the global basis in which the EDA Consortium is providing data.

The consortium reckons that the EDA industry - which includes computer-aided design, integrated circuit physical design and testing, circuit board and multi-chip module design, semiconductor intellectual property sales, and services relating to these areas - had a 10.9 per cent decline in the third quarter, to $1.26bn.

Companies selling computer-aided engineering products represent the biggest part of the EDA space, but in the third quarter, they did not take the biggest hit (but declined more than the overall market just the same). The consortium estimates that CAE sales came to $465.4m in the third quarter, down 17.6 per cent, while IC design and test products came to $298.7m, down 22.3 per cent. Printed circuit boards and multi-chip module technology accounted for $130.9m, up 2.5 per cent, and semiconductor intellectual property sales came to $267.8m, up 1.8 per cent.

Services sales across all EDA categories (not including product maintenance fees, but including real services) came to $104.8m, up 25 per cent. It looks like EDA customers are doing what many IT shops are trying to do: engage vendors in services contracts to try to get the most out of what they already have.

For the first nine months of 2008, EDA product sales are $3.97bn, down 5.3 per cent.

North America, which is the biggest market for EDA products, accounted for $555.5m in sales in the third quarter, down 11 per cent, while Western Europe saw a slightly steeper decline of 12.9 per cent to $247.7m in EDA sales. Revenues from EDA products in Japan were slightly larger than Western Europe, at $254.8m, down 15.3 per cent. The rest of the world, which includes India, China, Singapore, and Indonesia, of course, had only a 0.9 per cent decrease to just over $200m.

That's the bad news. The good news is that jobs in the EDA industry are going up. In the first quarter of 2007, the EDA Consortium estimated that 25,820 people were employed in the industry. Excepting a small dip in the first quarter of 2008, jobs have grown each quarter, and now 28,176 people get their paychecks from industry players. How long that will that last if there is a prolonged downturn in the IT sector and consolidation or elimination of products? That's the big question. We'll have a better sense when the consortium puts out numbers for the fourth quarter of 2008 some time in the early spring. ®

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