Electronic Design Automation Tools (EDA) Market By Type (Computer-Aided Design Software, Printed Circuit Board Design And Layout Tools), By Application (Communication, Consumer Electronics), & Region for 2024-2031

Electronic Design Automation Tools (EDA) Market Valuation - 2024-2031

Increasing complexity in semiconductor designs is propelling the adoption of electronic design automation tools (EDA). Emerging technologies like 5G, AI, and IoT drive the need for sophisticated EDA tools to optimize performance and efficiency is driving the market size surpass USD 13.69 Billion valued in 2024 to reach a valuation of aroundUSD 27.37 Billion by 2031.

In addition to this, incorporating AI and ML into EDA tools enhances design automation, predictive analysis, and optimization is spurring up the adoption of electronic design automation tools (EDA). The rising need for customized and adaptable design solutions are enabling the market to grow at aCAGR of 9.05% from 2024 to 2031.

Electronic Design Automation Tools (EDA) Market: Definition/ Overview

Electronic design automation (EDA) tools are software applications used to design, analyze, and verify electronic systems and semiconductor devices. These tools assist engineers and designers in creating intricate circuit designs, performing simulations, and ensuring the functionality and reliability of electronic components before physical production. EDA encompasses a broad range of functionalities including schematic capture, layout design, and hardware verification.

EDA tools are pivotal across various industries, including consumer electronics, automotive, aerospace, and telecommunications. They enable the creation of complex integrated circuits (ICs) and printed circuit boards (PCBs) by automating the design process and providing critical insights through simulation and analysis. Applications range from designing microprocessors and memory chips to developing circuit boards for smartphones, medical devices, and advanced automotive systems.

The future of electronic design automation (EDA) tools is set to evolve due to technological advancements like 5G, AI, and quantum computing. These tools will incorporate advanced algorithms and AI-driven features to improve design efficiency and accuracy. The integration of machine learning and real-time data analytics will further streamline development processes and accelerate innovation in the electronics industry.

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How will Rapid Advancement of Semiconductor Technology Increase Adoption of Electronic Design Automation Tools (EDA)?

The rapid advancement of semiconductor technology is a key driver of the electronic design automation (EDA) tools market. As chip designs become increasingly complex, with nanometer-scale features and billions of transistors, EDA tools are essential for efficient design and verification processes. According to the U.S. Bureau of Labor Statistics, employment of electrical and electronics engineers is projected to grow 3 percent from 2021 to 2031, indicating a steady demand for advanced design tools. In a recent development, Synopsys, a leading EDA company, announced in January 2024 the release of its next-generation AI-powered chip design platform, aimed at accelerating the development of advanced semiconductors for 5G, AI, and IoT applications.

The growing adoption of artificial intelligence and machine learning in various industries is fueling demand for specialized chips, driving the need for sophisticated EDA tools. These tools are crucial for designing AI accelerators and optimizing power efficiency in machine learning hardware. The U.S. National Science Foundation reported in 2023 that it had invested over USD 500 Million in AI research and development initiatives, highlighting the increasing focus on AI technologies. For instance, Cadence Design Systems unveiled in March 2024 its new suite of EDA tools specifically tailored for AI chip design, featuring advanced power analysis and optimization capabilities.

The rise of Internet of Things (IoT) devices and smart connected systems is another significant driver of the EDA Tools Market. As IoT applications proliferate across industries, there is a growing need for EDA tools that can handle the unique requirements of low-power, highly integrated IoT chip designs. The European Union's Horizon Europe program allocated €95.5 billion for research and innovation from 2021 to 2027, with a significant portion dedicated to digital technologies including IoT. Capitalizing on this trend, Siemens EDA (formerly Mentor Graphics) announced in April 2024 the launch of its comprehensive IoT chip design platform, offering end-to-end solutions for designing, verifying, and testing IoT-specific integrated circuits.

Will Complexity of EDA Tools Hamper Electronic Design Automation Tools (EDA) Market Growth?

The complexity of EDA tools, coupled with a steep learning curve, is a significant challenge. These tools often come with extensive features and functionalities that require substantial training and experience to use effectively. For organizations lacking dedicated resources for training and support, this complexity can slow down the design process and hinder the efficient adoption of new technologies.

Integration issues also present a restraint in the EDA market. Incorporating EDA tools into existing design workflows and legacy systems can be fraught with difficulties. Compatibility problems and the need for synchronization between different tools can lead to inefficiencies and delays, necessitating considerable customization and technical support to achieve a seamless workflow.

Also, the rapid pace of technological advancements in electronics and semiconductor design can quickly render EDA tools outdated. As new design methodologies and technologies emerge, existing tools may struggle to keep pace, requiring frequent updates or replacements. This continuous evolution creates challenges for both EDA vendors to remain competitive and users to adapt to new versions and capabilities.

The significant cost associated with acquiring and maintaining advanced EDA tools poses a major constraint for the market. Licensing fees, hardware requirements, and ongoing support can be prohibitively expensive, particularly for smaller companies and startups. This financial burden can limit access to state-of-the-art tools and create disparities between larger, well-funded organizations and smaller players in the industry.

Category-Wise Acumens

Will Rise in Adoption of Computer-Aided Design (CAD) Software Drive Electronic Design Automation Tools (EDA) Market Growth?

Computer-Aided Design (CAD) Software is emerging as a dominant segment within the Electronic Design Automation (EDA) Tools Market, driven by its critical role in the initial stages of electronic product development. CAD tools enable engineers to create detailed 2D and 3D models of electronic components and systems, forming the foundation for subsequent design and simulation processes. According to the U.S. Bureau of Labor Statistics, employment of electrical and electronics drafters, who extensively use CAD software, is projected to grow 3% from 2021 to 2031, indicating sustained demand for these tools. For instance, Autodesk, a leading CAD software provider, announced in January 2024 the release of its next-generation EDA-specific CAD platform, featuring enhanced integration with other EDA tools and improved support for advanced packaging designs.

The increasing complexity of electronic designs, particularly in emerging fields such as 5G, IoT, and AI hardware, has further solidified the importance of CAD software in the EDA workflow. These tools are evolving to handle more sophisticated designs while improving productivity and collaboration among design teams. The European Union's Horizon Europe program allocated €95.5 billion for research and innovation from 2021 to 2027, with a significant portion dedicated to digital technologies, including advanced design tools.

As the electronics industry continues to push the boundaries of miniaturization and performance, CAD software is adapting to address new challenges in areas such as 3D IC design and advanced packaging. These tools are becoming increasingly integrated with other EDA functionalities, offering seamless workflows from initial concept to final manufacturing. The Japan External Trade Organization (JETRO) reported that in 2023, Japan's CAD/CAM system market reached 192.8 billion yen (USD 1.7 Billion), highlighting the significant role of these tools in the electronics industry.

Which Factors Enhance the Use of Electronic Design Automation Tools (EDA) in Consumer Electronics Sector?

The consumer electronics sector is emerging as a dominant force in driving the electronic design automation (EDA) tools market, fueled by the ever-increasing demand for sophisticated smartphones, tablets, wearables, and smart home devices. This sector's rapid innovation cycle and need for complex, power-efficient designs have made EDA tools indispensable in the development process. According to the U.S. Consumer Technology Association, the U.S. consumer technology industry is projected to generate $505 billion in retail sales revenue in 2024, highlighting the sector's significant economic impact. In a recent development, Synopsys, a leading EDA company, announced in February 2024 the launch of its new AI-powered design platform specifically tailored for consumer electronics, promising to reduce time-to-market for complex SoC designs.

The proliferation of Internet of Things (IoT) devices in the consumer space has further amplified the importance of EDA tools in the Consumer Electronics Sector. These tools are crucial for designing the compact, low-power, and highly integrated chips required for IoT applications. The European Commission reported that the EU's IoT market is expected to reach €1,181 billion by 2025, indicating significant growth potential in consumer IoT devices. For instance, Cadence Design Systems unveiled in March 2024 a comprehensive EDA suite optimized for IoT chip design, featuring advanced power analysis and RF design capabilities tailored for consumer wearables and smart home devices.

As consumer electronics continue to incorporate more advanced technologies such as AI, 5G, and augmented reality, the complexity of chip designs is increasing exponentially, further cementing the sector's dominance in the EDA Tools Market. These advanced applications require sophisticated EDA tools capable of handling multi-physics simulations and system-level optimizations. The Japan Electronics and Information Technology Industries Association (JEITA) forecasted that the global shipments of consumer electronics will reach 2.5 billion units in 2025.

Country/Region-wise Acumens

Will Rising Industrialization Enhance Adoption of Electronic Design Automation Tools (EDA) in Asia Pacific?

The Asia Pacific region is expected to dominate the electronic design automation (EDA) tools market, driven by the rapid growth of semiconductor industries in countries like China, Taiwan, and South Korea. These nations have made significant investments in chip design and manufacturing capabilities, fueling demand for advanced EDA tools. According to China's Ministry of Industry and Information Technology, the country's integrated circuit industry revenue reached 1.05 trillion yuan (USD 162.3 Billion) in 2022, marking a 16.2% year-on-year increase. For instance, Synopsys, a leading EDA company, announced in February 2024 the expansion of its R&D center in Bangalore, India, to support the growing demand for EDA solutions in the region.

The push for technological self-reliance and innovation in the Asia Pacific has led to increased government support for the semiconductor industry, further boosting the EDA Tools Market. Countries in the region are investing heavily in developing domestic chip design capabilities to reduce reliance on foreign technologies. Japan's Ministry of Economy, Trade and Industry reported that it had allocated 70 billion yen (USD 612 Million) in 2023 to support domestic semiconductor production and R&D. For instance, Cadence Design Systems unveiled in March 2024 a new suite of EDA tools specifically tailored for the Asian market, featuring enhanced support for local design standards and manufacturing processes.

The rapid adoption of 5G, artificial intelligence, and Internet of Things (IoT) technologies in the Asia Pacific is driving the need for more sophisticated and specialized chip designs, further propelling the EDA Tools Market. These advanced applications require complex, high-performance chips that can only be designed efficiently with cutting-edge EDA tools. The South Korean government announced in its Digital New Deal 2.0 plan that it would invest 12.7 trillion won (USD 10.8 Billion) by 2025 in digital infrastructure, including 5G and AI technologies.

Will Presence of Numerous Key Players in North America Drive Electronic Design Automation Tools (EDA) Market Growth?

North America is experiencing rapid growth in the electronic design automation (EDA) tools market due to its robust technological infrastructure and high concentration of major electronics and semiconductor companies. The region's leadership in innovation, particularly in sectors like telecommunications, automotive, and consumer electronics, drives substantial demand for advanced EDA solutions. Companies in North America are increasingly investing in EDA tools to stay competitive and meet the escalating complexity of electronic designs.

The presence of numerous key players and technology giants in the U.S. and Canada further fuels the market's expansion. These firms are continuously advancing their design capabilities and investing in cutting-edge EDA tools to enhance performance, optimize design processes, and accelerate time-to-market. Additionally, the region benefits from a strong ecosystem of research institutions and development centers that contribute to ongoing advancements in EDA technology.

Government initiatives and funding for technology innovation also play a critical role in the growth of the EDA market in North America. Support for R&D and the promotion of new technologies stimulate demand for sophisticated EDA solutions. This environment fosters continuous development and adoption of state-of-the-art tools, positioning North America as a leader in the global EDA market.

Competitive Landscape

The electronic design automation tools (EDA) market is a dynamic and competitive space, characterized by a diverse range of players vying for market share. These players are on the run for solidifying their presence through the adoption of strategic plans such as collaborations, mergers, acquisitions, and political support.

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the electronic design automation tools (EDA) market include:

• Cadence Design Systems, Inc.
• Synopsys, Inc.
• Mentor Graphics (Siemens EDA)
• ANSYS, Inc.
• Altium Limited
• Keysight Technologies, Inc.
• Xilinx, Inc.
• Maxim Integrated Products, Inc.
• Silvaco, Inc.
• MathWorks, Inc.
• LTspice (Linear Technology Corporation)
• Dialog Semiconductor PLC
• Magma Design Automation (Acquired by Synopsys)
• Zuken, Inc.
• Maplesoft (a division of Cybernet Systems Co., Ltd.)
• AWR Corporation (an NI company)
• Fabrinet
• Agnitio
• Riverside Technologies
• Oasys Design Systems

Latest Developments

• In June 2024, Synopsys announced the release of its next-generation RTL-to-GDSII platform, incorporating advanced machine learning algorithms to enhance design efficiency and accuracy in semiconductor verification.
• In July 2024, Cadence Design Systems unveiled a new version of its digital design tool suite, featuring improved AI-driven automation capabilities that significantly reduce design cycle times for complex IC designs.