Semiconductor Intellectual Property (IP) Market Forecast Report

Updated on : Oct 23, 2024

Semiconductor Intellectual Property (IP) Market Size & Growth

The semiconductor intellectual property (IP) market size was valued at USD 7.5 billion in 2024 and is projected to reach USD 11.2 billion by 2029; growing at a CAGR of 8.5% from 2024 to 2029.

Factors such as increasing demand for advanced semiconductor components in telecom & data centers, and automotive sector, and expanding embedded digital signal processor IP and programmable digital signal processor IP segments create lucrative opportunities whereas constant technological changes resulting in increased expenditure, and concerns related to Moore’s law major restraint for the growth of the semiconductor intellectual property (IP) market.

Attractive Opportunities in the Semiconductor Intellectual Property (IP) Market

Semiconductor Intellectual Property (IP) Market Forecast to 2029

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Semiconductor Intellectual Property (IP) Market Dynamics:

Driver: Increasing demand for electronics in healthcare and telecommunications industries

After the recent pandemic, the demand for new and advanced medical equipment to conduct analysis and diagnosis has increased in the healthcare industry. Portable medical equipment, for instance, patient monitoring devices, witnessed a surge in demand throughout the pandemic.  The increased global awareness has created an immense demand for personal monitoring devices even after the pandemic.

Large infrastructure equipment, such as medical imaging systems and biochemical analysis equipment, is used in the healthcare industry. These instruments feature low system noise and consume less power; this was made possible because of semiconductor intellectual property (IP) licensing available to medical device manufacturers, helping them solve unique design challenges. Conventional medical equipment has long relied on software solutions and complex electronics to function.

The telecommunications industry also saw an increased demand for electronics during the pandemic due to the implementation of work from home (WFH) and remote learning policies. Easy-to-use communication tools that enable remote work and learning, as well as teleconferencing instruments witnessed a huge spike in demand during the pandemic period.

Semiconductor IPs are used in the telecommunications vertical for networking, video communication, voice communication, wired infrastructure, and wireless infrastructure telecommunication equipment manufacturing.

Restraint: Concerns related to Moore’s Law

According to Moore’s Law (stated by Gordon Moore, the founder of Intel, in 1965), the number of transistors in a dense integrated circuit will double approximately every two years. Moore’s words were true to an extent, but this increase in the number of transistors reached 3 billion, built over an advanced 14 nanometer (nm) manufacturing process.

This technological advancement offered long battery life, computing, video capturing, mobile connectivity, and security features. However, no further advancements in IC technology were noted as the industry players continued to fail to develop a new process node of sizing less than 10 nm.

This could mean that Moore’s Law becomes irrelevant. This can either cause a slowdown in semiconductor market growth, or end IC development. It could also result in new beginnings for the semiconductor industry, leading to modern technologies such as silicon photonics.

Opportunity: Rising demand for advanced semiconductor components in automotive and telecommunications & data center verticals

Companies in the telecom & data centers, and automotive sector rely on sophisticated, complex electronic systems. The increasing demand for electronics and semiconductor components in these sectors created the need for innovative design solutions for chip manufacturing.

The applications of MCUs, MPUs), analog ICs, sensors, interfaces, and memory in EVs, HEVs, autonomous vehicles and premium vehicles are increasing. As the significance of electronics mobility, connected cars, and vehicle connectivity increases, the demand for small gadgets with high functionality and performance improvements in the automotive sector is also expected to increase rapidly. Thereby, creating opportunities for players operating in the semiconductor intellectual property (IP) market.

Challenges: Increasing IP thefts and counterfeiting

 A majority of IP thefts, counterfeiting, and conflicts take place in Asia Pacific. IP thefts and counterfeiting lead to prohibitive costs. IP thefts mainly take place in ASIC and FPGA semiconductor intellectual property (IP) cores; this has been a major area of concern in other critical submarkets of the semiconductor intellectual property (IP) market.

In the current business models followed worldwide, IP counterfeiting, particularly the development of counterfeit components and system-level designs of IP cores, is the major threat. SRAM FPGAs are most vulnerable to such IP thefts and frequently fail to offer full functionality.

Several efforts are being made worldwide to address this major issue. For instance, the World Semiconductor Council (WSC), which currently comprises semiconductor industry players from Europe, Japan, China, Taipei, South Korea, and the US, has a dedicated task force for IP theft prevention.

This force comprises a pool of IP experts from all major geographies involved in semiconductor manufacturing. WSC also executes various national layout design laws and has laid out a multipronged approach to restrict the counterfeiting of semiconductor chips and IP designs.

Semiconductor Intellectual Property (IP) Market Market Map

Semiconductor Intellectual Property (IP) Market Market Segmentation

Royalty segment to account for the largest market share of the semiconductor intellectual property (IP) market, by IP source, during the forecast period.

The royalty segment of the semiconductor intellectual property (IP) market holds the largest market share and is expected to retain its position by growing at the highest growth rate during the forecast period from 2024 to 2029.  

Due to the benefit that the royalty IP source offers where the manufacturers are free to produce as many products as they want and pay a royalty for only those products, in today’s scenario of rapid technological changes. The 5G network rollout by operators has given a boost to the growth of the royalty segment as many base stations and wireless network equipment are based on various types of processor and interface IPs.

Consumer electronics segment accounts for the largest market share of the semiconductor intellectual property (IP) market, by vertical, during the forecast period.

The consumer electronics sector holds the largest market share and is expected to retain its position during the forecast period due to the increasing adoption of modern system-on-chips (SOC) designs in modern consumer electronic devices such as smartphones tablets, laptops and others.

Technologies such as AI, IoT, machine learning, virtual reality, and augmented reality, as well as the increasing penetration of 5G technology are expected to create opportunities for players operating in the semiconductor intellectual property (IP) market.

The Asia Pacific region is expected to grow at the highest growth rate during the forecast period.

Asia Pacific is expected to be the fastest-growing market for semiconductor IPs during the forecast period. High demand for consumer electronics products, especially smartphones and laptops, is expected to drive the growth of the semiconductor intellectual property (IP) market in the region.

The presence of several semiconductor foundries is also expected to increase the implementation of semiconductor IP design in various applications. The increasing trends of vehicle automation and mobility are expected to boost the growth of the market for semiconductor IP in Asia Pacific for the automotive vertical.

Semiconductor Intellectual Property (IP) Market by Region

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Top Semiconductor Intellectual Property (IP) Companies - Key Market Players

• Arm Limited (UK),
• Synopsys, Inc. (US),
• Cadence Design Systems, Inc. (US),
• Imagination Technologies (UK),
• CEVA, Inc. (US),
• Lattice Semiconductor (US),
• Rambus (US),
• eMemory Technology Inc. (Taiwan),
• Silicon Storage Technology, Inc. (US),
• VeriSilicon (China),
• Achronix Semiconductor Corporation (US),
• ALPHAWAVE SEMI (UK),
• Analog Bits (US), ARTERIS, INC (US),
• Frontgrade Gaisler (Sweden),
• Dolphin Design (France,
• Dream Chip Technologies GmbH (Germany),
• Eureka Technology, Inc. (US), among others, are some key players operating in the Semiconductor Intellectual Property (IP) companies.

Semiconductor Intellectual Property (IP) Market Report Scope

Semiconductor Intellectual Property (IP) Market Highlights

This research report categorizes the semiconductor intellectual property (IP) market based on Design IP, IP Source, IP Core, End User, Interface Type, Vertical, and Region.

Recent developments in Semiconductor Intellectual Property (IP) Industry

• In September 2023, VeriSilicon (China) announced that Inuitive (US), a leading vision-on-chip processor company, had adopted its dual-channel Image Signal Processor (ISP) IP, featuring low latency and low power capabilities, into its mass-produced NU4100 vision AI processor. This integration brings outstanding imaging and vision experience to Robots, Augmented Reality (AR), Virtual Reality (VR), Mixed Reality (MR), Drones, and many other applications.
• In March 2023, eMemory Technology Inc. (Taiwan) and United Microelectronics Corporation (Taiwan), one of the leading global semiconductor foundries, announced that the Resistive Random Access Memory (RRAM) Ips offered by eMemory Technology Inc. has been qualified on UMC’s 22nm ultra-low-power process, adding to UMC’s comprehensive embedded memory offering for IoT and mobile applications. The two companies are also jointly developing new RRAM solutions for the automotive sector.
• In March 2023, Rambus (US) announced to offer IP cores such as Arm CryptoCell and CryptoIsland Root of Trust cores as part of its security IP portfolio, enabling customers to access the comprehensive security IP portfolio with solutions tailored to their specific architecture. Rambus will also provide ongoing support, maintenance, and development of Arm security IP.

Critical questions answered by this report:

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