Semiconductor IP Market Growth Analysis | 2023-2028

Market Insights

The semiconductor IP market was estimated at USD 5.58 billion in 2022 and is likely to grow at a CAGR of 5.72% during 2023-2028 to reach USD 7.74 billion in 2028.

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Market Dynamics

Introduction

A semiconductor intellectual property (IP) is referred to as the reusable unit of a logic, cell, or chip layout design. It is generally developed to be leased out to various vendors as a foundational component for various chip designs & sophisticated devices. SIP is pre-verified and usually has a license fee attached to its usage. SIPs are most used for processors, interconnects, peripherals, and memory drives.

COVID-19 Impact

The COVID-19 pandemic has moderately affected the semiconductor IP sector. The pandemic has caused the semiconductor companies to mobilize quickly and make both long-term and short-term adjustments in their business models in the sales & distribution capabilities of their product offerings are concerned. Supply disruptions as well as shifts in consumer spending affected market growth.

Market Drivers

The global semiconductor IP market is driven by a host of factors, some of which are noted below:

• Increasing adoption of connected devices for daily use as well as a rise in the demand for electronics from the healthcare industry amid the COVID-19 pandemic along with the surging need for teleconference instruments.
• The connected devices are connected to other networks or devices through many communication protocols, such as NFC, Wi-Fi, and Bluetooth.
• Growing demand for consumer electronics particularly in emerging markets of China and India.
• Due to the growing trend of outsourcing semiconductor design, fabless semiconductor companies are seeing a rise in demand for semiconductor IP.
• The increasing requirement for high-performance, low-power semiconductors across a wide range of applications, including smartphones, tablets, laptops, and servers.
• The rising popularity of advanced technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT), necessitates the use of specialized semiconductor IP.

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Challenges:

The high development cost of semiconductor IP is a significant challenge for the semiconductor IP sector. Creating semiconductor IP is a difficult and time-consuming process. As a result, semiconductor IP vendors may find it difficult to repay their investment in IP creation.

Another difficulty for the semiconductor IP business is the extended development cycle for semiconductor IP. A new piece of semiconductor IP can take several years to develop. This can make it challenging for semiconductor IP sellers to keep up with the semiconductor industry's rapid pace of innovation.

Another concern is the increased rivalry in the semiconductor IP industry. The market is crowded with semiconductor IP vendors, and competition is severe. As a result, semiconductor IP vendors may find it challenging to differentiate their products and services from those of their competitors.

Opportunities:

The increasing complexity of semiconductor designs is driving the increased demand for custom semiconductor IPs. As semiconductor designs get increasingly complicated, semiconductor businesses are finding it more difficult to produce all of the IP they require in-house. This creates an opportunity for semiconductor IP providers to give unique IP solutions to their customers based on their specific needs.

A further significant prospect for the semiconductor IP market is the growing need for semiconductor IP for developing applications. As new applications emerge, such as wearables, drones, and driverless vehicles, specialized semiconductor IP is required to support these applications. Semiconductor IP providers who can create IP solutions for these upcoming applications will be well-positioned for expansion.

The expanding trend of IP licensing is bringing new revenue streams to semiconductor IP producers. Traditionally, semiconductor IP providers sold their IP primarily through direct sales. However, IP licensing is becoming more popular as semiconductor businesses seek to license IP from third-party providers. This trend is presenting semiconductor IP vendors with new revenue prospects.

Segment Analysis

By Revenue Type

“The royalty segment dominates the market during the forecast period.”

The market has been classified into licenses, royalties, & services. Under these, the royalty segment occupied the largest market share in 2022 and is expected to remain the largest market for semiconductor IP during the forecast period. Because of mass procurements of semiconductor IPs from leading electronics device manufacturers.

However, the licensing category is expected to develop with the highest CAGR during the forecast period. This is primarily due to the increasing acceptance of licensed semiconductor IP goods and solutions from wireless device manufacturers. Several wireless device makers are adopting licensed IP solutions to produce connected communication devices.

By End-Use Type

“The consumer electronics segment dominates the market during the forecast period.”

The market has been classified into consumer electronics, computers and peripherals, automobiles, industrial, and others. Under these, the consumer electronics segment held a significant market share in 2022 and is expected to maintain its dominance during the forecast period. This is mainly attributed to the increasing adoption of modern system-on-chip (SoC) designs in consumer electronics such as smartphones, tablets, laptops, etc., thereby boosting segment growth.

By IP Type

“The processor IP sector accounts for the maximum share of the market during the forecast period.”

The market has been classified into Processor IP, Wired and Wireless Interface IP, and Others. Under these, the processor IP sector is expected to have the greatest market share since it is widely employed in the production of consumer electronics such as smartphones, CPUs, laptops, and others.

Additionally, the market is divided into design IP segments such as interface IP, processor IP, memory IP, and others (verification IP, graphics IP). The expanding global sales of various smart and IoT devices support the expansion of the processor IP market.

Regional Insights

“The Asia-Pacific region held the highest market share during the forecast period.”

The region is projected to grow at a healthy CAGR in the coming years. This is majorly ascribed to the presence of domestic players, strong presence of semiconductor and consumer electronics manufacturers, a growing use of smart devices, surging, and robust demand for smart wearables, laptops, and smartphones, etc., further bolstering the regional market growth during the review period.

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Key Players

The market is highly populated with the presence of several local, regional, and global players. Most of the major players compete in some of the governing factors, including price, product offerings, regional presence, etc.  

The following are the key players in the semiconductor IP market (arranged alphabetically).

• Andes Technology Corporation (Taiwan)
• ARM Ltd (SoftBank) (UK)
• Cadence Design Systems Inc. (US)
• CEVA Inc. (US)
• Digital Media Professionals (Japan)
• Faraday Technology Corporation (Taiwan)
• Fujitsu Ltd (Japan)
• MediaTek Inc. (Taiwan)
• Mindtree Limited (India)
• Synopsys Inc. (US)

Note: The above list does not necessarily include all the top players in the market.

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Research Methodology

This strategic assessment report, from Stratview Research, provides a comprehensive analysis that reflects today’s semiconductor IP market realities and future market possibilities for the forecast period of 2023 to 2028. After a continuous interest in our semiconductor IP market report from the industry stakeholders, we have tried to further accentuate our research scope to the semiconductor IP market to provide the most crystal-clear picture of the market. The report segments and analyses the market in the most detailed manner to provide a panoramic view of the market. The vital data/information provided in the report can play a crucial role for the market participants as well as investors in the identification of the low-hanging fruits available in the market as well as to formulate the growth strategies to expedite their growth process.

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools. More than 1000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data. We conducted more than 15 detailed primary interviews with the market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market. The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
• COVID-19 impact and its recovery curve
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Market Segmentation

This report studies the market, covering a period of 12 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The semiconductor IP market is segmented into the following categories:

By Revenue Type

• License
• Royalty
• Services

By IP Type

• Processor IP
• Wired and Wireless Interface IP
• Others

By End-Use Type

• Consumer Electronics
• Computers, and Peripherals
• Automobile
• Industrial
• Others

By Region

• North America (Country Analysis: the USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, the UK, Russia, Spain, and Rest of Europe)
• Asia-Pacific (Country Analysis: China, Japan, India, South Korea, and Rest of Asia-Pacific)
• Rest of the World (Sub-Region Analysis: Latin America, the Middle East, and Others)

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Report Customization Options

Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Product portfolio, geographical reach, regional presence, and strategic alliances

Custom Research: Stratview Research offers custom research services across sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@stratviewresearch.com.