The EDAC Market Statistics Survey (MSS) data for PCB reflect interesting trends. Starting in Q4 1999, and extending through the second quarter of 2001, PCB tool licenses and maintenance revenues jumped as the board industry entered a major tool replacement cycle. During this period, board manufacturers found that the previous generation of tools were incapable of meeting the requirements of the latest generation semiconductor processes. Boards and systems makers got sucked into the faster, smaller, sooner development cycles and found that the older tools didn't have all of the required functions. For example, a large Midwestern industrial controls company, whose products have cycle times measured in multiple seconds, found that their latest generation boards didn't work because the components on the board created noise and interference due to the very high-speed edge rates.

Most of the users in this formerly pedestrian area have found that this earlier generation of tools is rapidly becoming obsolete. Printed circuit boards are no longer just a piece of fiberglass that holds the parts and wiring, but are driven by the changes in IC packaging and connection density. Now the design rules for PCBs include constraints on traces for spacing, length, metal fill, shielding and power planes, and many 3 D characteristics such as stack-up, blind and buried vias, and other critical requirements that used to be much lower order effects.

To address the new design requirements, the PCB tools either include noise and signal integrity analysis, or are built to easily connect to these types of tools. On top of these analyses, the latest tools address the vastly expanded sets of design rules and even perform interconnect synthesis to ensure design-rule correctness. The EDA vendors making PCB tools have been living happily on the this annuity, since the latest generation of tools replaces a $5,000 tool with a $25,000+ toolset. In addition, those companies not making integrated tools benefit from sales of the separate analysis tools, which are included as CAE sales rather than PCB licenses in the MSS reports.

The turn-of-the-century also brought in another change of great significance. In 2001, silicon intellectual property (SIP) revenues exceeded those for PCB tools. The one extreme difficulty in gauging the performance of this sector this is very high segmentation. It is very difficult to measure a market segment when there are no barriers to entry. Small IP companies can be a single person developing designs on a computer and selling those designs on the Internet. At one point in time, over 700 companies were considered SIP vendors. Now, a smaller, but still unknown, number of companies are in this sector.

At the other end, some of the large companies are not reporting all or any of their revenues. To make analysis even more difficult, this revenues in this sector include license fees, royalties, development systems, and services. In fact, two of the larger companies—Arm, Ltd and Rambus, Inc.—are not reporting revenues for the MSS report. heir revenues are added to the total SiP revenues reported in the MSS, but they are identified as non-reporting companies in the footnote that accompanies the table. In addition, two large semiconductor companies—Altera and Xilinx, who create and sell IP as enablers for their programmable products—are not even considered within this category.

These omissions imply that the SIP market is much larger than the reported numbers and is likely to be the main growth engine for EDAC in the years to come. SIP grew at a compound rate of about 20 percent a year between 1998 and 2006 and an even more explosive 34 percent when the analysis starts in 1996. Within a few years, "official" SIP revenues will exceed those of the IC design and verification tools. Unfortunately, the cross-over point will be nebulous at best—akin to the dawning of the Age of Aquarius—since the composition and even the definition of the SIP category has been changing over time, with the latest changes in 2004.

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