Electronic Design Automation Market Size to Reach USD 39.73 Billion by 2034 as Chip Design Activity Expands

The electronic design automation market was valued at USD 18.72 billion in 2025. It is projected to reach USD 39.73 billion by 2034. It is projected to grow at a CAGR of 8.7% from 2026 to 2034.

EDA software helps engineers design and test electronic products before manufacturing. The need for EDA software is increasing since chips have become highly specialized and designing is becoming increasingly difficult without the use of advanced software tools.

Custom Silicon Adds to EDA Demand

More companies are turning to custom chips for specific product needs. Automotive is one area where this change is becoming clear. Vehicle makers are looking for greater control over the hardware used in their platforms. In September 2026, Tata Consultancy Services launched custom system-on-chip design services for automotive OEMs and semiconductor companies. The service covers chip design, verification, implementation, and validation (source: tcs.com). More custom silicon projects mean more work for EDA software during the chip development cycle.

Verification Takes on Greater Importance

Chip verification is becoming more demanding as designs become larger and more detailed. A design error found late in development can lead to another design cycle. This can add time and cost to a project. A September 2026 study from Siemens EDA and Wilson Research Group found that only 5% of IC and ASIC respondents reported first-silicon success in 2026. The figure was 14.4% in 2024 (source: siemens.com). The findings point to the growing amount of work required before chips reach production.

Chiplets Change the Design Environment

Chiplet architectures are adding new requirements beyond conventional chip design. Several dies may need to work together inside one package. Engineers must account for connections between the dies during development. Package design also has a greater effect on system performance. These changes are creating demand for tools that connect chip design with packaging and system analysis. The same shift is supporting work around interposers and advanced substrates, including glass interposers.

AI Brings New Design Methods

AI is becoming part of the EDA software landscape. Current tools use it for tasks such as design optimization and verification. Newer platforms are also being built around automated design tasks. Agentic workflows were a bigger focus at DAC 2026 in areas such as synthesis and verification. This is prompting interest in new kinds of EDA software (source: siemens.com). At the same time, traditional design tools continue to support current engineering teams.

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Cloud Deployment Opens Another Route

On-premises deployment accounted for 58.74% of the electronic design automation market share in 2025. Semiconductor giants usually perform their EDA computing tasks within their organization itself. This happens because of security concerns and engineering infrastructure already available there. However, the cloud-based approach is becoming more popular in light of changing trends regarding workload.

Organizations may enhance computing capacity for workload tasks not only by increasing internal capacity for each workload task but also with the help of cloud computing. There is also another approach, which is hybrid deployment. The hybrid approach is chosen by companies that want to distribute workloads between on-site and cloud infrastructure.

Asia Pacific Grows at Fastest Rate

Asia Pacific is expected to grow at fastest rate of 11.27% during forecast period. Some of the countries in Asia Pacific that have active semiconductor industries include Taiwan, South Korea, Japan, China, and India, each playing different roles in design and manufacture. The foundry-oriented design software is significant in Taiwan and South Korea. India is also establishing a broader base of semiconductor design companies. The Indian government reported in August 2026 that firms under the Design Linked Incentive scheme have raised more than $100 million and taped out 35 designs (source: pib.gov.in). North America is estimated to experience a CAGR of 8.74% through 2034. This is owing to semiconductor research and development activities and public investments.

Competition Covers the Full Design Cycle

The EDA industry competition is centered around already existing software companies, with the small ones concentrating on individual design activities. The range of products encompasses IC design, verification, simulation, semiconductor IP, PCB development, and packaging. Foundries are also important since the software should be compatible with certain manufacturing processes. Vendors are also adding new capabilities as chip designs move toward smaller nodes and more complex system structures. Key companies include Aldec, Altium, Ansys, Autodesk, Blue Pearl Software, Cadence Design Systems, Intel, Keysight Technologies, MathWorks, PDF Solutions, Siemens EDA, Silvaco, Synopsys, and Zuken.

Market Outlook

The electronic design automation market is moving toward broader software use across semiconductor design. Custom silicon will support demand from new design programs. Verification will remain an important part of development as chip complexity rises. Packaging and system-level design will also require closer coordination with EDA tools. Cloud deployment and newer automation methods are adding further options for design teams. The market is expected to expand as semiconductor development reaches more companies and regions.

Electronic Design Automation Market Segmentation

By Product Category: Computer-aided Engineering (CAE) | Semiconductor Intellectual Property (IP) | IC Physical Design and Verification | PCB (Printed Circuit Board) and MCM (Multi-chip Module) | Services

By Deployment Mode: On-Premises | Cloud-Based | Hybrid (Burst to Cloud)

By Workflow Stage: Front-End Design Tools | Verification Tools | Physical Design Tools | Sign-Off Tools | Packaging & System-Level Tools

By Application: Microprocessors & Microcontrollers | Memory Management Units | Others

By Region: North America (U.S., Canada) | Europe (Germany, UK, France, Italy, Spain, Netherlands, Russia, Rest of Europe) | Asia Pacific (China, Japan, India, South Korea, Malaysia, Indonesia, Australia, Rest of Asia Pacific) | Latin America (Brazil, Mexico, Argentina, Rest of Latin America) | Middle East & Africa (Saudi Arabia, UAE, Israel, South Africa, Rest of Middle East & Africa)