Cloud-Based Tools and SoC Complexity Propel U.S. Electronic Design Automation Software Market Expansion

According to the latest market research study published by P&S Intelligence, the U.S. electronic design automation software market reached USD 4.8 billion in 2024 and is projected to nearly double, soaring to USD 9.9 billion by 2032, driven by a 9.8% CAGR during 2025–2032. This robust growth is fueled by continuous innovations in semiconductor technology and surging adoption of AI, IoT, and 5G across key sectors. The increasing complexity of integrated circuits and system-on-chip (SoC) designs has made advanced EDA tools—spanning computer-aided engineering (CAE), IC physical design, verification, and semiconductor IP—essential for industry players.

One transformative trend shaping the market is the shift toward cloud-based EDA solutions, which offer scalability, cost efficiency, seamless updates, and enhanced collaboration—significantly reducing time-to-market. Additionally, escalating demand for advanced semiconductors in consumer electronics, automotive, aerospace, healthcare, and defense underscores the critical role EDA plays in enabling efficient design cycles, robust verification, and thermal/power optimization.

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Key Insights

• The computer-aided engineering (CAE) segment led the market in 2024, accounting for 55% of revenue, reflecting its pivotal role in pre-production design and simulation of complex electronic systems.
• Regarding deployment, on-premises solutions dominated with 60% market share in 2024. This preference highlights firms’ need for strong data control and system customization despite rapid growth in cloud alternatives.
• In terms of application, digital design was the largest category (~55%), driven by extensive use of logic synthesis, simulation, and verification amid booming AI, IoT, and 5G deployments.
• Among end-use industries, consumer electronics held around 40% share, propelled by increasing complexity in smartphones, laptops, and smart devices. Meanwhile, automotive design emerged as the fastest-growing sector.
• Geographically, the Western U.S. was both the largest (45%) and fastest-growing region (10% CAGR), anchored by Silicon Valley and significant technology hubs like Seattle.
• Emerging trend: Cloud-based EDA platforms are gaining traction due to scalability, reduced license and hardware costs, improved engineer collaboration, faster design cycles, automatic updates, and enhanced security protocols.
• The advanced semiconductor wave—including photonics, micromechanics, and SoC miniaturization—is fueling demand for EDA tools that support SPICE simulations, functional/timing verification, logic and physical synthesis, and power optimization.
• The growing complexity of SoC designs has elevated the need for high-end verification capabilities. Advanced functional verification and logic synthesis tools help designers detect errors early, streamline production, and meet rising performance demands.
• Industry fragmentation prevails, with leading players like Synopsys, Cadence, Siemens EDA, and Mentor Graphics controlling significant market share. High development costs and strong IP portfolios create substantial entry barriers for newcomers.
• Strategic moves include Renesas Electronics’ acquisition of Altium in August 2024 and Ansys’s purchase of Diakopto in May 2023—signaling ongoing consolidation focused on strengthening design and simulation capabilities.
• Opportunities abound in automotive—a rising fastest-growing vertical—as EVs, ADAS, smart sensors, and high-bandwidth computing demand increasingly sophisticated EDA workflows.
• Continued advancement in AI and ML integration within EDA tools enhances precision and accelerates design exploration for next-gen ICs.
• Cloud-based verification solutions offer remote collaboration and faster update cycles, aligning well with geographically dispersed R&D teams.