From AI processors to electric vehicles, rising chip design complexity is driving demand for electronic design automation tools worldwide through 2034.
The global Electronic Design Automation (EDA) market is expected to grow from US$20.93 billion in 2026 to US$43.07 billion by 2034, according to a market study by Polaris Market Research, reflecting increasing demand for tools used in semiconductor and electronic system design.
The report projects a compound annual growth rate (CAGR) of 9.4 per cent during the 2026-2034 period, supported by rising semiconductor complexity, growing adoption of artificial intelligence, expansion of automotive electronics, and increasing investment in advanced computing technologies.
EDA software is used throughout the semiconductor development process, enabling engineers to design, simulate, verify and prepare integrated circuits, printed circuit boards and system-on-chip architectures for manufacturing.
As semiconductor fabrication advances to smaller process nodes, including 5nm and 3nm technologies, the need for automated design and verification tools has increased significantly.
The report identified several factors contributing to market growth. Increasing transistor density and more complex chip architectures are making manual design approaches less practical, leading semiconductor companies to rely more heavily on EDA platforms for design validation and manufacturing readiness.
Artificial intelligence (AI) is also being incorporated into EDA software to automate portions of the design process, improve error detection and accelerate development cycles. At the same time, demand from automotive applications continues to grow as manufacturers expand the use of electronics in electric vehicles (EV), advanced driver assistance systems, battery management systems and autonomous driving technologies.
Cloud-based EDA platforms accounted for 67.1 per cent of market revenue in 2025, according to the report. These solutions enable distributed engineering teams to access computing resources without extensive on-premises infrastructure, making them particularly attractive for smaller semiconductor firms and start-ups.
Among product categories, semiconductor intellectual property (IP) is forecast to be the fastest-growing segment, with a projected CAGR of 9.8 per cent through 2034. The use of pre-verified IP blocks allows companies to shorten development timelines and reduce engineering costs.
Regionally, North America held the largest market share in 2025, accounting for nearly 50 per cent of global revenue. However, Asia Pacific is expected to record the fastest growth through 2034, driven by semiconductor research and development investments in countries including China, Japan, South Korea and Taiwan.
The report also highlighted the growing importance of chiplet architectures and 3D integrated circuit technologies, which are creating new requirements for EDA tools capable of managing multi-die designs, thermal performance and interconnect reliability.
As semiconductor development becomes increasingly sophisticated, EDA software is expected to remain a critical component of the global electronics industry.
