Chip design software revenue kept growing in the second quarter of 2026. According to the ESD Alliance, a SEMI Technology Coalition, the electronic system design (ESD) industry, which covers electronic design automation (EDA) tools, semiconductor intellectual property (IP) and related services, brought in $5,710.8 million in Q2 2026. That is 12.2% more than the $5,089.4 million it reported for Q2 2025. The figures come from the group’s latest Electronic Design Market Data (EDMD) report, announced on October 19, 2026.
The four-quarter moving average, which compares the latest four quarters with the four before them, rose 11.2%, according to the release.
Where chip design software revenue grew in Q2 2026
Most categories went up, but not all of them. According to the ESD Alliance:
- Semiconductor IP was the biggest single category, up 20.4% to $2,199.0 million.
- Computer-aided engineering (CAE), the tools used to design and simulate circuits, rose 7.7% to $2,077.6 million.
- IC physical design and verification rose 16.6% to $818.3 million.
- Services rose 25.1% to $251.7 million, the fastest growth of any category, though from a small base.
- Printed circuit board and multi-chip module (PCB and MCM) tools were the exception, falling 15.4% to $364.2 million.
Taken together, total EDA revenue was $3,260.0 million, up 6.5%. So the headline 12.2% depends heavily on semiconductor IP and services, not only on design tools. In a quote in the release, Walden C. Rhines, executive sponsor of the report and chief executive of Silvaco Group, said all product categories except PCB and MCM reported gains.
For a look at how AI is starting to change the design tools themselves, see our report on ChipAgents and NVIDIA testing AI agents on full chips.
Asia Pacific leads chip design software growth by region
Every region grew, according to the report, but at very different speeds:
- Asia Pacific (APAC) bought $2,298.7 million of electronic system design products and services, up 22.4%.
- The Americas, still the largest region, bought $2,443.5 million, up 7.1%.
- Japan rose 9.3% to $303.1 million, although its four-quarter moving average fell 8.2%.
- Europe, the Middle East and Africa (EMEA) grew 2.3% to $665.6 million.
That leaves APAC about $145 million behind the Americas this quarter. The release does not break APAC down by country, so it does not say how much of that growth comes from any one market, including India.
Headcount fell even as revenue rose
The companies tracked in the report employed 71,396 people worldwide in Q2 2026. That is 1.6% fewer than the 72,529 a year earlier. The release also says headcount was down 1.6% compared with “Q1 2025”; that may be a typo for Q1 2026, but the release does not clarify it.
The release does not explain why jobs fell while revenue grew. Any explanation would be guesswork.
What the ESD Alliance report does not tell us
A few limits are worth keeping in mind. The data comes from public and private companies that choose to contribute, plus estimates for some IP companies that do not report directly (the release names ARM, CEVA and Rambus as “non-reporting” companies). The figures are in nominal dollars, and the release does not adjust for currency moves or acquisitions. It also does not name the companies driving growth, and the full report is a paid product from SEMI, so the release is only a summary. For related reading on the business side of chips, see our story on the FormFactor and Teradyne chip-testing deal and on computational lithography from Siemens and NVIDIA.
My view on the chip design software boom
As a writer, I think the most telling number is not the 12.2% headline but the 20.4% rise in semiconductor IP. Chip makers seem to be buying more ready-made building blocks rather than designing everything themselves, which fits a world where chips are getting more complex and design teams are not getting bigger. The falling headcount is the part I would watch. It might mean the industry is doing more with fewer people, or it might mean pressure on jobs, and one quarter of data can’t tell us which.
FAQ: chip design software revenue
How much did the chip design software industry earn in Q2 2026?
According to the ESD Alliance, electronic system design revenue was $5,710.8 million in Q2 2026, up 12.2% from $5,089.4 million in Q2 2025.
Which part of the industry grew fastest?
Services grew fastest at 25.1%, while semiconductor IP grew 20.4% and was the largest category at $2,199.0 million. PCB and MCM tools fell 15.4%.
Did jobs in the industry grow too?
No. Tracked companies employed 71,396 people, 1.6% fewer than a year earlier, according to the report.