Electronic Design Automation (EDA) Software Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Computer-aided Engineering (CAE), IC Physical Design & Verification, Printed Circuit Board & Multi-chip Module (PCB & MCM), Semiconductor Intellectual Property (SIP), Services), By Application (Communication, Consumer Electronics, Automotive, Industrial), By Region, and By Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 18.65 Billion
CAGR (2026-2031)	10.73%
Fastest Growing Segment	Computer-Aided Engineering (CAE)
Largest Market	North America
Market Size (2031)	USD 34.38 Billion

Market Overview

The Global Electronic Design Automation (EDA) Software Market will grow from USD 18.65 Billion in 2025 to USD 34.38 Billion by 2031 at a 10.73% CAGR. Electronic Design Automation software comprises a category of digital tools utilized for the design, simulation, verification, and manufacturing of electronic systems such as integrated circuits and printed circuit boards. The primary drivers supporting market growth include the intensifying demand for high-performance semiconductors in the automotive and artificial intelligence sectors which necessitates precise design capabilities to manage increasing complexity. According to the ESD Alliance, in 2025, the industry reported that revenue increased by 8.8 percent to 5.1 billion dollars during the third quarter of the prior year. This financial trajectory highlights the essential nature of these tools in the modern semiconductor supply chain.

Despite this expansion, the market faces a significant challenge regarding the acute shortage of skilled engineering talent capable of navigating complex design environments. This workforce gap restricts the ability of organizations to fully leverage the software capabilities and maintain the rapid pace of innovation required by the industry. Consequently, companies must contend with extended development cycles and increased operational costs which can impede the broader adoption of advanced automation solutions.

Key Market Drivers

Integration of Artificial Intelligence and Machine Learning for Design Optimization acts as a primary catalyst, transforming the efficiency of semiconductor engineering. As the physical limitations of silicon are approached, AI-driven EDA tools are becoming indispensable for automating labor-intensive tasks such as placement and routing, which drastically reduces design iterations while maximizing power, performance, and area (PPA) metrics. This technological shift is translating into substantial financial growth for leading vendors; according to Cadence Design Systems, February 2025, in the 'Q4 2024 Earnings Report', quarterly revenue rose 27 percent to 1.36 billion dollars, a surge attributed to the accelerated deployment of AI-driven digital portfolios. This momentum is mirrored across the broader sector, as according to Synopsys, in December 2024, the company reported a 15 percent annual revenue increase to 6.1 billion dollars, signaling sustained investment in next-generation automation.

Escalating Chip Complexity and Adoption of 3D IC Architectures simultaneously drives market expansion as the industry embraces heterogeneous computing. The exponential increase in transistor density, coupled with the adoption of chiplet-based designs and 3D stacking, necessitates advanced simulation platforms capable of handling intricate multi-physics and thermal challenges. To cope with these requirements, design teams are increasingly dependent on third-party intellectual property to streamline development and mitigate risk. Consequently, according to the ESD Alliance, July 2025, in the 'Electronic Design Market Data report', Semiconductor Intellectual Property (SIP) revenue increased by 29.6 percent in the first quarter of 2025, demonstrating the essential function of pre-verified IP in managing the growing intricacies of modern system-on-chip architectures.

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Key Market Challenges

The shortage of skilled engineering talent constitutes a significant restraint on the expansion of the global Electronic Design Automation software market. As semiconductor designs transition toward smaller nodes and increasingly complex architectures, the software tools required to develop them become intricate and demanding. However, the industry currently lacks a sufficient volume of qualified personnel with the specialized expertise needed to operate these platforms effectively. When organizations cannot secure enough engineers to manage these workflows, they are unable to fully utilize the capacity of automation tools, which directly limits the number of software licenses and seats that vendors can sell to technology firms.

This workforce gap causes operational inefficiencies that impede broader market adoption. Without adequate staff to execute designs rapidly, companies face extended product development timelines and escalating overhead expenses, which restricts the capital available for investing in new automation solutions. According to the Semiconductor Industry Association, in 2024, the US semiconductor sector faces a projected shortfall of 67,000 technicians, computer scientists, and engineers by 2030. This projected deficit indicates that the available user base for design tools is not growing at a rate sufficient to match technological advancements, thereby moderating the revenue potential for software providers.

Key Market Trends

The Growth of In-House Silicon Design by Hyperscalers and System Companies significantly reshapes the market landscape as non-semiconductor entities increasingly develop custom integrated circuits to differentiate their products. Tech giants and automotive manufacturers are bypassing standard off-the-shelf components in favor of bespoke system-on-chips (SoCs) tailored for specific workloads such as artificial intelligence training and autonomous driving. This vertical integration strategy necessitates heavy investment in primary design and simulation tools to manage the entire development lifecycle internally, thereby fueling demand for Computer-Aided Engineering (CAE) solutions. Consequently, according to the ESD Alliance, October 2025, in the 'Electronic Design Market Data report', Computer-Aided Engineering (CAE) revenue increased by 17.2 percent to 1,929 million dollars during the second quarter of 2025, reflecting the surge in license procurement by these new market entrants.

Migration Towards Cloud-Based EDA Platforms and SaaS Delivery Models represents a fundamental shift in how computational resources are accessed and how software is monetized. As transistor counts explode and engineering teams become more distributed, the immense compute power required for tasks like physical verification and lithography simulation exceeds the capacity of traditional on-premises data centers, prompting a move to elastic cloud infrastructure. Simultaneously, vendors are transitioning from perpetual licensing to subscription-based Software-as-a-Service (SaaS) models, which provide customers with greater flexibility while securing predictable recurring revenue streams for providers. This transition to ratable revenue models is evident in financial metrics; according to Cadence Design Systems, October 2025, in the 'Third Quarter 2025 Financial Results', the company reported a record backlog of 7.0 billion dollars, underscoring the industry's successful pivot toward long-term, subscription-based cloud engagements.

Segmental Insights

Computer-Aided Engineering (CAE) represents the fastest-growing segment within the Global Electronic Design Automation (EDA) Software Market, driven by the critical need for advanced simulation and functional verification. As electronic architectures become increasingly complex, manufacturers utilize CAE tools to model performance and identify design errors early in the development cycle. This reliance allows engineering teams to validate systems without costly physical prototyping, thereby reducing overall production expenses. Consequently, the high demand for error reduction and shorter development timelines in the semiconductor and automotive sectors continues to accelerate the adoption of CAE software.

Regional Insights

North America leads the Global Electronic Design Automation (EDA) Software Market, primarily driven by the extensive presence of major industry vendors such as Synopsys and Cadence Design Systems. The region benefits from a mature semiconductor ecosystem that rapidly integrates artificial intelligence and cloud computing for chip design. Furthermore, the United States government actively supports the sector through legislative measures like the CHIPS and Science Act, which funds domestic research and manufacturing. This strong institutional backing, combined with high demand from the automotive and consumer electronics industries, secures the region's dominant market share.

Recent Developments

• In October 2024, Keysight Technologies entered into a strategic collaboration with Siemens EDA to streamline the design process for complex wireless and defense systems. The partnership integrated Keysight’s Advanced Design System with Siemens’ Xpedition Enterprise software, establishing a seamless bidirectional workflow between radio frequency circuit simulation and digital system layout. This integration allowed engineers to efficiently co-design multi-domain systems by eliminating manual data translation errors and maintaining data integrity. The joint solution was aimed at accelerating the development of high-speed communications, radar, and electronic warfare applications by bridging the gap between RF and digital design environments.
• In April 2024, Cadence Design Systems unveiled its next-generation hardware verification platforms, the Palladium Z3 Emulation and Protium X3 Prototyping systems. These new offerings were engineered to handle the immense complexity of modern massive chip designs, supporting capacities of up to 48 billion gates. The platforms demonstrated a significant leap in performance, delivering more than twice the capacity and notably faster compile times compared to previous generations. This launch specifically targeted the rigorous demands of hyperscale computing and artificial intelligence applications, providing a unified verification flow to accelerate the time-to-market for large-scale semiconductors.
• In April 2024, Siemens Digital Industries Software announced a successful collaboration with TSMC to achieve new product certifications for advanced semiconductor manufacturing processes. The partnership focused on optimizing electronic design automation tools for TSMC's latest fabrication nodes and 3DFabric advanced packaging technologies. Both companies worked together to develop methodologies for 3D integrated circuit design-for-test implementations, leveraging the 3Dblox standard to simplify workflows. This cooperation enabled mutual customers to effectively address the thermal and physical verification challenges associated with developing complex, high-performance next-generation integrated circuits for the global market.
• In March 2024, Synopsys launched a new AI-driven capability known as 3DSO.ai to significantly enhance productivity in semiconductor design. This innovation was introduced to autonomously search and optimize 3D design spaces for power, performance, and area in multi-die systems. By leveraging generative artificial intelligence, the tool allows engineering teams to maximize system performance and quality of results for complex 3D integrated circuit architectures. The company emphasized that this solution addresses the growing challenges of systemic complexity and R&D capacity, facilitating the broader mainstream adoption of advanced multi-die designs in the era of pervasive intelligence.

Key Market Players

• Cadence Design Systems, Inc.
• Synopsys, Inc.
• Siemens Digital Industries Software
• Ansys, Inc.
• Keysight Technologies, Inc.
• Mentor, a Siemens Business
• Silvaco, Inc.
• Zuken, Inc.
• Altium Limited
• Dassault Systèmes

By Type	By Application	By Region
Computer-aided Engineering (CAE) IC Physical Design & Verification Printed Circuit Board & Multi-chip Module (PCB & MCM) Semiconductor Intellectual Property (SIP) Services	Communication Consumer Electronics Automotive Industrial	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Electronic Design Automation (EDA) Software Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Electronic Design Automation (EDA) Software Market, By Type:

• Computer-aided Engineering (CAE)
• IC Physical Design & Verification
• Printed Circuit Board & Multi-chip Module (PCB & MCM)
• Semiconductor Intellectual Property (SIP)
• Services

• Electronic Design Automation (EDA) Software Market, By Application:

• Communication
• Consumer Electronics
• Automotive
• Industrial

• Electronic Design Automation (EDA) Software Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE