Reflecting year-over-year growth in the PCB/MCM and services, offset by declines in CAE, IC physical design and verification, and semiconductor IP, revenue for the electronic design automation (EDA) industry in Q2 declined 3.7% to $1.36 billion, from $1.41 billion in Q2 2007 and was just slightly higher than $1.35 billion in Q1, according to the EDA Consortium (EDAC) Market Statistics Service (MSS).

"Solid year over year growth in the PCB/MCM and services segments were offset by declines in CAE, IC Physical Design & Verification, and Semiconductor IP, resulting in an overall decline for Q2, 2008," commented Walden C. Rhines, EDAC chair and Mentor Graphics' CEO and chairman, in a statement.

On a geographic basis, Western Europe and Japan showed growth in Q2, but this growth was offset by declines in North America and the rest of the world, EDAC said.

Employment in EDA was up, as companies that were tracked employed 28,004 professionals in Q2, up 7% from the 26,164 employed in Q2 2007.

By product category, EDA's largest category, computer aided engineering (CAE), generated revenue of $524.7 million in Q2, which represented a 2.6% decrease from the same period in 2007, with the four quarter moving average CAE growth rate positive at 6.8%.

For IC physical design and verification tools, the next largest category, revenue decreased to $317.1 million in Q2, a 20.2% decline from Q2 2007, with the four quarter moving average growth rate declining 2.6% for this category.

On the bright side, printed circuit board and multi-chip module (PCB and MCM) revenue increased 19.3% from Q2 2007 to $141.6 million, which the four quarter moving average growth rate showing a 1% decrease.

For semiconductor intellectual property (SIP), revenue totaled $264.9 million in Q2, a 1.6% decrease over Q2 2007, with the four quarter moving average growth rate slightly down at 0.8%.

Meanwhile, services revenue was $109 million in Q2, up 28.5% from Q2 2007, with the four quarter moving average growth rate up 10.7%.

By consuming region, EDA's largest region - North America - purchased $585 million of EDA products and services in Q2, representing a 13.3% decline from Q2 2007, with the four quarter moving average growth rate down 6.9%.

Western Europe revenue was up 10.5% in Q2 compared to Q2 2007, with revenues of $273.4 million, and the four quarter moving average growth rate up 11.6%.

Q2 revenue from Japan increased 13.7% to $281.8 million compared to Q2 2007, and the four quarter moving average increase was 13.1%.

Finally, the Rest-of-World region decreased to $217.1 million in Q2 2008, a 9% decrease compared to the same quarter in 2007, with the four quarter moving average growth rate positive at 6.7%, EDAC concluded.

By Ann Steffora Mutschler, Senior Editor - Electronic News

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