The presence of numerous semiconductor companies such as Samsung, SK Hynix and Toshiba along with electronic device OEMs such as Sony, LG, Haier, Lenovo, Xiaomi, Nikon, Pioneer, Voltas, Panasonic, ASUS and Havells has made APAC the fastest growing region in the global electronic design automation (EDA) market, according to Technavio. Furthermore, the outsourcing of software development to APAC is also a major factor for this growth.

Globally, the EDA market is forecast to grow at a CAGR of 8.25% during the period of 2016-2020.

Increasing requirement for SoC technology

The growth in the smart appliance and digital home markets during the last decade has resulted in high demand for high-powered, efficient, and smart electronic devices from the end-user segment. These changes have been brought about by advances in device technology and the integration of billions of transistors on a particular chip called SoC. The high processing capability of these chips has made it possible to adhere to the demand for embedded graphics and multicore technologies. This development is in line with the growing complexity of chip designs in the semiconductor industry.

According to Sunil Kumar Singh, a lead analyst at Technavio for research on embedded systems, “Manufacturers of smart electronics such as wireless communication equipment, ECG, smartphones, telemetry devices, and automotive body electronics have started integrating SoC technology into their products. In addition, with the emergence of system-in-package technology, mixed-signal SoC manufacturers are now able to integrate more functionality onto a single chip at a moderate price.”

Tiny devices of high precision

The demand for compact electronic devices has grown in almost every sector, including communication, automotive, industrial manufacturing, and healthcare equipment. This trend has forced semiconductor IC manufacturers to increase R&D expenditure in order to reduce the size while optimising the performance of ICs. This has led to the emergence of microelectromechanical systems (MEMS) and 3D semiconductor devices. MEMS and 3D ICs have an increasing number of interconnects and transistors in the limited space, which requires finer deposition and patterning.

“Therefore, the miniaturization of electronic devices will have a moderately high impact on the development of advanced production system for MEMS, 3D ICs, and fin-shaped field effect transistors or FinFETs, creating the need for electronic design automation to carry out the designing for the semiconductor devices,” said Sunil.

Adoption of FinFET architecture

The surging demand for smart devices such as digital cameras, smartphones, notebooks, PDAs, PCs, and tablets along with the advent of new technology platforms such as the IoT has necessitated chip manufacturers to migrate from planar FET designs to FinFET architecture design. Dielectric etching is one of the major etching steps in the designing process. The need for improving performance and reducing power consumption has resulted in a wider adoption of FinFET architecture. FinFETs are estimated to be 37% faster than planar FET, consuming less than 50% of the dynamic power, or reducing static leakage current usage by almost as much as 90%. The increasing adoption of FinFET in 3D semiconductor devices is expected to fuel the demand for designing tools such as EDA tools because of the complex nature of FinFET designs.

High R&D investments

R&D forms an integral part of the semiconductor industry. The semiconductor industry recorded its highest R&D spending of $56.4 billion in 2015. This, however, is not in lieu of the industry standard for R&D spending since 2010, which grew at an average of 13% on a yearly basis. The industry spending toward R&D was up by only 0.5% from 2014, which is the lowest the industry has witnessed since the downturn of 2009. The spending was also below the CAGR of 4% between 2005 and 2015.

Intel, one of the leading chip vendors in the market, accounted for 22% of total semiconductor spending in 2015. This was the highest among leading players such as Qualcomm, Samsung Electronics, and Avago Technologies and foundries such as Taiwan Semiconductor Manufacturing Corporation (TSMC).