Daniel Nenni

In my previous blog on the EDA CEO panel at #46DAC, I was very disappointed to hear some of the smartest men in our industry agree that the only way to increase semiconductor design enablement (EDA) revenues is to increase overall semiconductor revenues. Talk about a complete lack of respect for the innovative people who support them, when in fact executives like themselves, and even themselves, continue to minimize this industry through irresponsible pricing practices (Smorgasbored Pricing), reckless litigation (CDNS vs AVNT, MENT vs CDNS, SNPS vs LAVA), and egocentric behavior, which results in a colossal failure of common sense. Given that, let’s take a look at three different revenue data points and see how the economy is doing and how semiconductor and EDA revenues really correlate:

One of the economic bellwethers I subscribe to is the SIA Global Sales Report. The Semiconductor Industry Association has been around longer than I have, starting in 1977, the SIA has been collating financial data from semiconductor companies around the world. SIA also represents a coalition of 70+ companies that account for nearly 90% of the $120B semiconductor business in the United States.

The SIA Global Sales Report (GSR) is a three-month moving average of sales activity. The GSR is tabulated by the World Semiconductor Trade Statistics (WSTS) organization, an independent, non-profit organization established by the global semiconductor industry to compile industry statistics. The moving average is a mathematical smoothing technique that mitigates variations due to differences in companies’ financial calendars.

SIA reports July as another positive month: Worldwide sales of semiconductors in July were $18.2 billion, an increase of 5.3 percent from June 2009 when sales were $17.2 billion, the Semiconductor Industry Association (SIA) reported today. SIA noted that the year-on-year rate of decline has moderated as the year has progressed. The first six months of 2009 saw an average monthly year-on-year decline of approximately 25 percent, while July 2009 sales were 18.2 percent lower than July 2008. All monthly sales numbers represent a three-month moving average of global semiconductor sales.

TSMC is my most trusted economic bellwether, which I have charted on three other occasions:  TSMC Wafer Allocation, TSMC Yields Recovery, and Economic Recovery.

EDA economic data is (slowly) tracked by the Electronic Design Automation Consortium or EDAC as it is affectionately known as. EDAC is the international association of companies developing EDA tools and services that enable engineers to create the world’s electronic products. The EDA Industry provides the critical technology to design electronics that enable the Information Age, including communications, computers, space technology, medical and industrial equipment and consumer electronics. This detailed description is mainly for my family and friends since they have no idea what I do for a living. Now click HERE to see a VIRAL semiconductor video clip!

Okay, so the charts prove absolutely nothing, but I have already written my 500 words so there is no turning back now. Of course this is an apples to oranges to cherries comparison but it will be interesting to see what numbers appear next year. Still, my firm belief is that semiconductors are where electronics begin, the sales growth of electronic devices is where the recovery begins, so the recovery has definitely begun, believe it.