The global semiconductor IP market size is expected to grow from USD 5.5 billion in 2021 to USD 7.2 billion by 2026, at a CAGR of 5.4%. The market has a promising growth potential due to several factors, including growing adoption of semiconductor components especially processor IPs, interface IP in consumer electronics, automotive, telecommunications & data center verticals will drive the demand for this market in the near future.
The major factor restraining the growth of the semiconductor IP market constant technological changes in the semiconductor industry . In each leap, new technologies would enter the market and break the equilibrium. The same applies to the IC industry, where process nodes play a vital role. Changes in the nodes of a semiconductor chip can change design complexity, chip form factor, and IP core design architecture. The most common task in advanced SoC design is the effective implementation of these SoC chips in advanced technologies, such as 20 nm planar and FinFET processes.The adoption of advanced technology nodes increases design costs for IP vendors, while payments for licensing the IP suitable as per the new technology node may not match up to the rise in expenditure. The overall cost of SoC designs, including silicon IP and software IP, has increased by ~40%, with a shift in the node size from 32 nm to 28 nm, and is expected to increase by 30% after the shift to 22 nm. The overall cost of SoC silicon IP design has increased by approximately 36%, with the node of 28 nm.
The market slightly declined in 2020, mainly due to the impact of COVID-19. The supply chains were disrupted in March and April 2020 due to the lockdown imposed by various governments and labor shortages in these industries due to travel restrictions, which would affect the semiconductor IP market. Though the market has been impacted in 2020, it is expected to fully recover by mid 2022.
“Interface IP: The fastest growing segment of the semiconductor IP market, by design IP”
The interface IP segment is expected to grow at the highest CAGR during the forecast period. Data-centric, hyperscalar, data center, storage, wired and wireless networking, and emerging AI applications require higher bandwidth, where interface protocols such as PCIe, Ethernet, and SerDes are highly demanded. Furthermore, entertainment devices, security cameras, and smart home devices process a large amount of media content. To handle the increasing multimedia processing and connectivity needs, these devices require efficient interface IPs. Also, the growing concern for safety features in automotive SoCs requires devices to meet stringent safety and reliability standards. Interface IPs provide designers with the confidence to develop complex SoCs according to the automotive process capability index distributions. All these factors are expected to contribute to the growth of interface IPs during the forecast period.
“Royalty: The largest segment of the semiconductor IP market, by IP Source”
The royalty IP source segment is witnessing healthy growth due to rapid technological changes that are helping manufacturers to produce as many products as they want and pay a royalty for only those products. The rapid global rollout of the 5G network by operators is also supporting the growth of the royalty IP source segment as many base stations and wireless network equipment are based on different processor IPs and interface IPs. The increasing penetration of 5G smartphones is one of the major factors for the growing adoption of royalty IP sources. Various countries have already been investing in 5G technology to enhance their digital infrastructure and stay competitive in the digital economy. These countries are expected to play a vital role in the growth of the royalty IP source market in various verticals, such as consumer electronics and telecommunications & data center.
“APAC has the largest market share in the semiconductor IP market”
The APAC region is expected to dominate the semiconductor IP market and is projected to have the largest market share during the forecast period. Also, the region has countries like Taiwan, South Korea China and Japan where several major players carry out their operations, sales and distribution. Major players in the chip industry in APAC include Intel (US), Qualcomm (US), Advanced Micro Devices, Inc. (US), and Texas Instruments (US). The consumer electronics vertical would continue to dominate the market in APAC. Increasing demand for consumer electronics, especially smartphones, is expected to drive the growth of the semiconductor IP market in APAC. China is expected to hold the largest market share in APAC by 2026. These factors are expected to propel the semiconductor IP market in APAC
The study contains insights from various industry experts, ranging from component suppliers to Tier 1 companies. The break-up of the primaries is as follows:
- By Company Type: Tier 1 – 38%, Tier 2 – 35%, and Tier 3 – 27%
- By Designation: C-level Executives – 32%, Directors – 44%, and Others – 24%
- By Region: North America – 29%, Europe – 41%, APAC – 23%, and RoW – 7%
The report profiles key players in the global semiconductor IP market with their respective market share analysis. Prominent players profiled in this report are Arm Holdings Ltd (UK), Synopsys Inc (US), Cadence Design Systems, Inc (US), Imagination Technologies Ltd (UK), CEVA Inc (US), Lattice Semiconductor Corporation (US), Rambus Inc (US), eMemory Technology, Inc (Taiwan), Silicon Storage Technology, Inc (US), and VeriSilicon Microelectronics Co., Ltd. (China), Achronix Semiconductor Corporation (US), Alphawave IP (UK), Analog Bits, Inc. (US), Arteris Inc. (US), Cobham Gaisler AB (Sweden), Dolphin Design SAS (France), Dream Chip Technologies GmbH (Germany), Eureka Technology (US), Faraday Technology Corporation (Taiwan), M31 Technology Corporation (Taiwan), Open Five Inc (US), Renesas Electronics Corporation (Japan), Silvaco Inc. (US), TransPacket AS (Norway), and Xilinx Inc (US).
The report segments the semiconductor IP market and forecasts its size, by value, based on region (North America, Europe, APAC, and ROW), by design IP type (Processor IP, Memory IP, Interface IP and Other IPs), IP Source (Royalty. Licensing), IP Core(Soft IP, Hard IP) and vertical (consumer electronics, telecommunications & data center, automotive, commercial, industrial and others).
The report also provides a comprehensive review of market drivers, restraints, opportunities, and challenges in the semiconductor IP market. The report also covers qualitative aspects in addition to the quantitative aspects of these markets.
Key Benefits of Buying the Report
The report will help the leaders/new entrants in this market with information on the closest approximations of the revenue numbers for the overall market and the sub-segments. This report will help stakeholders understand the competitive landscape and gain more insights to better position their businesses and plan suitable go-to-market strategies. The report also helps stakeholders understand the pulse of the semiconductor IP market and provides them information on key market drivers, restraints, challenges, and opportunities.