Electronic Design Automation (EDA) Market to Experience Surge to US$32.88 Bn by 2032 - Persistence Market Research

The Electronic Design Automation (EDA) market has evolved significantly over the past few years, driven by advancements in semiconductor design, the increasing complexity of integrated circuits (ICs), and the rising demand for high-performance computing and mobile technologies. The global market for EDA software is set to witness robust growth, with projections suggesting a rise from US$ 17.59 billion in 2025 to US$ 32.88 billion by 2032, reflecting a compound annual growth rate (CAGR) of 9.4% during the forecast period. This growth is fueled by the rapidly advancing landscape of AI, IoT, and 5G, all of which require sophisticated chip designs and cutting-edge automation tools.

The adoption of cloud-based EDA platforms and the increasing integration of artificial intelligence (AI) and machine learning (ML) in chip design processes are some of the most prominent factors propelling the market forward. Companies like Synopsys, Cadence Design Systems, and Siemens EDA are at the forefront, developing advanced solutions that optimize the chip design cycle, reduce costs, and enhance design accuracy. The adoption of AI-driven tools that streamline optimization, verification, and validation tasks has significantly accelerated the design process, making it more efficient than ever before.

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Key Growth Drivers and Leading Segments

The main growth driver in the EDA market is the growing complexity of semiconductor designs. With integrated circuits becoming more intricate, especially with multi-billion transistor designs, the demand for advanced EDA tools that can handle these challenges is rising. AI and machine learning are increasingly becoming an integral part of the design process, especially for verification and optimization, which are crucial for reducing design time and improving performance. Furthermore, the growing need for automation in semiconductor production-particularly in AI, IoT, and 5G chipsets-has spurred the demand for sophisticated EDA tools that support these innovations.

Among the key market segments, the cloud-based EDA tools are expected to capture a significant share of the market. This growth is primarily driven by the expansion of AI, 5G, and IoT chip development, where cloud solutions provide scalable computing resources and collaborative design capabilities. Geographically, North America is expected to dominate the EDA market, with a projected market share of 45% by 2025. The region benefits from a highly developed semiconductor industry, a robust tech infrastructure, and significant investments in autonomous vehicle technology, consumer electronics, and high-performance computing applications.

Key Highlights from the Report

➤ The global EDA market is expected to grow from US$ 17.59 billion in 2025 to US$ 32.88 billion by 2032, at a CAGR of 9.4%.
➤ The adoption of cloud-based EDA platforms is set to grow, with the cloud segment estimated to capture 38% of the market by 2025.
➤ Integrated Device Manufacturers (IDMs) are expected to lead the market with a 42% share in 2025, supported by AI-driven chip designs.
➤ The AI and machine learning integration in EDA tools is set to enhance the productivity and power efficiency of chip designs.
➤ North America is predicted to maintain a dominant share of the EDA market, driven by semiconductor innovation and government support.
➤ In Asia Pacific, the EDA market is expected to grow at the fastest rate, with a CAGR of 6.9% from 2025 to 2032.

Market Segmentation: Product Type and Application

The Electronic Design Automation market is segmented into two major categories: solutions and services. The solutions segment is expected to dominate the market, accounting for 78% of the market share by 2025. This dominance is driven by the increasing demand for integrated EDA suites and standalone software solutions that support the design, simulation, and verification processes. Leading players such as Cadence Design Systems, Synopsys, and Siemens EDA are offering advanced AI-powered and cloud-based tools for system-on-chip (SoC) and chiplet designs. These tools enable semiconductor firms to address complex design challenges, particularly as process nodes shrink and demand for high-performance chips increases.

The services segment, while smaller, is also significant, projected to account for 22% of the market share. These services include design consulting, custom design services, and post-design support, including system-level optimization. As chip designs become more intricate, there is a growing need for specialized consulting services. This is particularly evident in the rise of heterogeneous integration and 3D packaging, where services for thermal analysis, signal integrity, and system-level verification are in high demand. Mentor Graphics (Siemens EDA) and ANSYS are among the key players offering these services.

Regional Insights: North America, Asia Pacific, and Europe

North America: The Industry Leader

North America is expected to maintain its leadership in the EDA market, holding a 45% share by 2025. The region benefits from a well-established semiconductor ecosystem, with major players such as Intel, NVIDIA, and AMD pushing the boundaries of chip design and high-performance computing. Additionally, investments in technologies such as AI, ML, and autonomous vehicles have bolstered the demand for EDA tools. The growing emphasis on edge computing and 5G technologies further accelerates the need for cutting-edge chip design solutions. Moreover, government initiatives like the CHIPS Act are expected to spur further growth in the semiconductor manufacturing sector, providing more opportunities for EDA software adoption.

Asia Pacific: A Fast-Growing Market

Asia Pacific is set to become the fastest-growing region for the EDA market, with a projected CAGR of 6.9% from 2025 to 2032. The region's semiconductor industry is booming, driven by manufacturing hubs in China, Taiwan, South Korea, Japan, and India. With rapid smartphone adoption and the proliferation of smart wearable devices, Asia Pacific is becoming a key player in semiconductor innovation. The rise of cloud computing in the region and the growing demand for AI-driven chip design tools will further propel the EDA market. Additionally, countries like China are investing in developing homegrown EDA solutions to reduce reliance on Western providers, further enhancing market opportunities.

Market Drivers: Miniaturization, AI, and Cloud Adoption

Trend of Miniaturization

One of the key drivers for the EDA market is the ongoing trend toward miniaturization in semiconductor design. As industries such as healthcare, automotive, aerospace, and consumer electronics demand smaller and more powerful chips, the need for advanced EDA tools becomes essential. For example, wearable technology, which saw global sales exceeding US$ 70 billion in 2023, is one area where miniaturization is critical. Similarly, automotive innovations such as Advanced Driver-Assistance Systems (ADAS) and Vehicle-to-Everything (V2X) communication chips rely on smaller, more efficient semiconductor designs. EDA tools are indispensable for creating energy-efficient, miniaturized semiconductor designs that meet these industry demands.

Integration of AI and Machine Learning

AI and machine learning are revolutionizing the EDA market by automating traditionally manual processes, such as design verification and optimization. AI-driven tools are enabling faster, more efficient chip designs, which is critical as chip designs become more complex with the introduction of multi-billion transistor layouts. For example, Synopsys' DSO.ai tool has enhanced design productivity by three times while consuming 30% less power. With AI taking over time-consuming tasks, such as circuit design, power optimization, and functional verification, EDA firms can deliver chips more quickly and with higher performance.

Cloud Adoption

The rise of cloud-based EDA platforms has transformed the semiconductor design process, enabling more collaborative workflows and scalable resources. Cloud platforms allow engineers to run large-scale simulations on demand, which significantly reduces time and costs. With major players like Synopsys and Cadence investing in cloud-based solutions, the adoption of cloud platforms in the EDA industry is poised to expand further. By 2025, the cloud-based EDA segment is projected to account for 38% of the market, driven by innovations in AI, 5G, and IoT.

Market Restraints: Shrinking Process Nodes and Complex Designs

While the growth prospects for the EDA market are strong, challenges remain. One significant restraint is the shrinking of process nodes. As the industry moves to smaller process nodes, such as 5nm and 3nm, new challenges arise in terms of power efficiency, chip density, and heat dissipation. The introduction of 3nm technology, led by companies like TSMC and Intel, has made it difficult to maintain the same level of performance and reliability. To address these challenges, EDA companies are incorporating AI-powered tools into their platforms to optimize layouts and ensure that chips remain reliable as process nodes shrink.

Key Market Opportunities: Advanced Packaging and AI-driven Innovation

As new technologies such as chiplets and 3D packaging emerge, they present significant opportunities for innovation in EDA tools. The demand for these advanced packaging techniques is rising as they allow for the integration of multiple smaller chips into a single package, improving performance and scalability while reducing costs. Companies like AMD, Intel, and TSMC are at the forefront of this trend, and EDA firms are developing new tools to support chiplet-based designs and 3D IC packaging. This opens up new avenues for EDA players to provide solutions for system-level integration, heat dissipation, and interconnectivity.

Frequently Asked Questions (FAQs)

➤ How Big is the Electronic Design Automation (EDA) Market?
➤ Who are the Key Players in the Global Electronic Design Automation Market?
➤ What is the Projected Growth Rate of the EDA Market?
➤ What is the Market Forecast for Electronic Design Automation by 2032?
➤ Which Region is Estimated to Dominate the EDA Industry through the Forecast Period?

Company Insights

✦ Synopsys Inc.
✦ Cadence Design Systems Inc.
✦ Siemens EDA
✦ Mentor Graphics (Siemens EDA)
✦ Keysight Technologies

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