ZUKEN is not a drone stock, but is a Yokohama-based company that provides CAD software for circuit and PCB design. This article examines the company’s business structure and market dynamics through the lens of a tool for drawing blueprints, rather than the aircraft or the chip itself.
The introduction explains why attention is being drawn to ZUKEN, a CAD-related company, amid the discussion surrounding drones. ZUKEN does not claim to have a direct business involving unmanned aircraft, but provides design software that plays an important role during the design phase. Its distinguishing feature is that it helps ensure consistency between bills of materials and design drawings.
The company’s strength is that “once it has entered a design department, it is not easily removed.” Switching design tools has implications beyond simply replacing software. Past assets, component libraries, design rules and even individual designers’ habits accumulate as assets within the tool, creating long-term customer dependence, according to the analysis.
Its revenue model has two tiers, consisting of license sales and maintenance services, giving it the characteristics of recurring revenue based on renewals. In terms of market dynamics, consolidation among large vendors is advancing in the EDA sector, and the sustainability of its leading position in Japan is an issue in considering how the company’s business stability may be affected.
As a company overview, ZUKEN has developed for more than half a century from its beginnings in printed circuit board CAD. It was founded in December 1976 and is headquartered in Yokohama. Its strategy of avoiding upstream semiconductor design and maintaining a leading position in fields supporting downstream processes is seen as a factor enabling it to avoid direct competition with major EDA vendors.