CFD breaks the $US 2B/yr Barrier and FEA crosses $US 3B/yr

Two very important revenue milestones are due to happen this year according to the CAE Analyst company, Cambashi in the UK* . The two largest Mechanical CAE (Computer-Aided Engineering) disciplines – Structures (FEA/CSM or structural analysis) and Fluids (Computational Fluid Dynamics) – are due to surpass market sizes of $US 3B/yr and $US 2B/yr respectively this year. These are major market size barriers to cross and illustrate how mature the CAE sector has now become after 50 years.

My own background in CFD commenced in 1989 after my PhD thesis when I joined British Steel PLC to be their commercial CFD leader and then in 1992 I switched to Fluent Europe Limited in Sheffield in the UK when they were just 10 people. Globally, CFD was only about $US 70M/yr. Way back then we could not have imagined a $US 2B/yr market even when we knew the software available then was barely scratching the surface of fluid dynamics simulation demand. Indeed, the opportunity to get CFD into the hands of professional engineers, designers and technicians who can benefit from it is barely 20% satisfied today in my estimation.

Over the last 30 years during my time at ANSYS (including Fluent), Mentor Graphics, and Siemens I’ve kept my own spreadsheets where I tracked every CFD product-line and company through various mergers and acquisitions. Ten years ago I published a blog post showing for the first time that the CFD sector had passed the key $US 1B/yr threshold in 2013/4 and was growing at a respectable CAGR of close to 10%. The CFD - and the CAE sector generally - is still growing at a rate of around 10% by all estimations, as indeed is FEA (Structures) which I saw first-hand at both ANSYS and Hexagon (MSC Software).

The continued steady growth of both the CFD and Structural Analysis (FEA) sectors can be attributed in part to Moore’s Law which states that computing power roughly doubles in memory capacity and CPU processing speed every 18 months to two years. This has been particularly supported and augmented in the last 20 years by the advent of HPC (High Performance Computing) and cheap Cloud Computing. When we add to these existing underlying factors the recent rapid advances in AI (Artificial Intelligence) and ML (Machine Learning) of late, the prospect for the immediate future of mechanical CAE usage is that it will continue to grow in the double digit range every year this decade unless there is a major disruption. Major companies like ANSYS, Siemens, and Dassault are continuing to dominate the CAE sector, but there are several hundred smaller players in a long tail of revenue generation, as well as many consultancies and start-ups in the AI and Cloud sectors. There are also other companies in allied niche areas like Discrete Element Modelling and Thermal Analysis, eg. Data Center CFD.

Cambashi maintains the industry’s most detailed Observatories in the world for CAE sector trends, including CFD and Structures/FEA, globally tracking CAE subsector revenues by product-line, company, industry sector, and country. This unrivalled level of granularity leads to invaluable industry insights, identification of sub trends, and guidance for making strategic growth decisions in the sector to minimize risk. You can download a recent UBS CAE Overview Investor's webinar slide deck from this link if you want to know more.

*The author has been an Associate of Cambashi Limited since June 2024