Semiconductor Intellectual Property (IP) Market Report Scope & Overview:

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The Semiconductor Intellectual Property (IP) Market size was valued at USD 7.04 billion in 2023 and is expected to reach USD 15.68 billion by 2032 and grow at a CAGR of 9.77% over the forecast period 2024-2032.

The semiconductor intellectual property market is a critical segment of the semiconductor industry that enables advanced electronic devices and systems by providing reusable design blocks. The burgeoning market for IoT devices offers significant opportunities, as these devices require specialized IP to handle connectivity, security, and data processing. 93% of executives believe the benefits of IoT outweigh the risks. IoT Analytics highlights that 54% of IoT projects are driven by cost savings. IoT is an industry that is expected to cross USD 1 trillion in 2024, which demonstrates the rapid growth and expansion of the industry. Moreover, according to Cisco, by 2030, there will be more than 500 billion devices connected to the internet. Every second, 127 new IoT devices are connected to the internet.

The ongoing transition to 5G technology presents substantial growth potential, as new IP cores are required to support high-speed communication and data transfer. For instance, in 2023, the U.S. National Science Foundation Directorate for Technology, Innovation, and Partnerships is ready to overcome a range of critical challenges related to 5G communication infrastructure and its operation due to a significant investment of USD 25 million. This investment proves the significance of TIP’s role and its commitment to connecting research communities with end-users in important technology areas. To achieve the aim, the foundation plans to ensure synergy between research innovators and end-users, including the U.S. military, the federal government, and critical infrastructure, all major users of 5G infrastructure.

MARKET DYNAMICS:

Drivers

• Increasing demand for advanced semiconductor components in automotive and telecommunications & data center Industry.

In the automotive market, the rising electric vehicle and autonomous driving markets are driving the reliability and support for such vehicles. Many of these vehicles are heavily dependent on semiconductor IP for functions such as power management, sensor integration, and advanced driver-assistance systems. The telecommunications and data center markets are predominately fueling the market. Considering the exponential growth in data traffic, and the increasing implementation of 5G networks and cloud services, there has been a growing demand for faster data researching and network capabilities as well as efficient power management. Semiconductor IPs are critical in designing the new set of chips capable of sourcing out the demand requirements, hence providing faster time-to-market solutions and also reducing development costs. As these markets pursue even more complex requirements, the demand for devices and IP will also rapidly grow. This in turn will be a driving factor in the expansion of the market.

• In the avionics and aerospace industries, programmable chips will be used more.

The determining factor for the future development of the semiconductor IP market is the growing use of programmable chips in avionics and the aerospace industry. Because the given areas require highly resilient and adaptable electronic tools to control such complex and dynamic systems as navigation and communication control and maintenance of correspondence systems, Field Programmable Gate Arrays (FPGA) and other programmable chips have gained popularity. Additionally, the adjustment is utilized in real-time, and the quickly changing conditions in the aerospace area demand appropriate components that would allow the systems to adapt to changing demands. As a result, the need for proper semiconductor IP solutions to satisfy the growing need for programmable chips is one of the main driving forces of the growth of the area. With the growth of the time-to-market rate, the cost-effectiveness of these solutions, and a constantly growing range of available products, the use of the given solutions is also bound to grow.

Restraints

• The semiconductor IP has plenty of unauthentic activities.

The market of semiconductor IP is highly obstructed by the various unauthentic activities being underway. IP theft, counterfeiting, and piracy make people lose confidence in the sphere which should have been the main driving force of the modern industry. Companies do not want to boost their R&D and invest too much in the sphere as their intellectual property will be fairly stolen sometimes. Furthermore, the counterfeit products are below the minimum quality limit differing in wrong features and endless mistakes. So it is hard for semiconductor and IP companies and businesses to operate in such a rapidly growing field getting more and more contradictory.

MARKET SEGMENTATION:

By Design IP

The processor IP segment dominated the semiconductor IP market in 2023 with a market share of over 42%. Processor IP is one of the most critical and fundamental components of the current state of the semiconductor industry. The purpose of the processor IP is to provide companies with pre-designed and verified processor cores that they can license and put into their semiconductor chips. The innovation has multiple advantages, from allowing companies to develop their chips faster, reducing costs, and achieving better performance in a wide variety of applications, from consumer electronics and data centers to automotive systems.

The interface IP is to grow at a faster CAGR during the forecast period. An interface IP is a semiconductor intellectual property whose purpose is to allow various components within an IC or even across multiple ICs to communicate. In short, it is similar to a standardized protocol like USB, PCIe, HDMI, Ethernet, etc., and it acts as the bridge between the two making the data sharing between them seamless.

By IP Source

The royalty segment of the semiconductor intellectual property market has the largest market share of above 50% in 2023 and is expected to retain the highest growth rate between 2024-2032. The royalty IP source is preferred because the manufacturers are only required to pay royalties for the products they manufacture. The new product life cycles have narrowed due to the rapid pace of technological changes. The deployment of 5G networks has promoted the growth of the royalty segment since many of the base stations and other wireless network equipment are by various forms of processor and interface IPs.

By Industry

The consumer electronics segment led the market with a market share of more than 38% in 2023 and going to remain the fastest-growing segment during 2024-2032. The increased adoption of smartphones, tablets, wearables, and other consumer gadgets has led to the upsurge of advanced semiconductor technologies. This has also consequently increased the demand for ingenious and innovative IP solutions from numerous suppliers. Moreover, the rise in promising opportunities in new markets such as machine learning, artificial intelligence, augmented reality, etc. as well as an increase in the market penetration rate of 5G phones may be the other major drivers of the growth of the semiconductor IP market for industry consumer electronics.

The ongoing rapid electrification and automation of vehicles as well as the burgeoning integration of ADAS and connected car features have also raised the demand for high-performance, and specialized semiconductor IP requirements, a situation that is expected to continue into the foreseeable future.

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REGIONAL ANALYSIS:

The Asia Pacific semiconductor IP market dominated with a market share of over 40% in 2023 and is to experience dynamic growth during the forecast period 2024-2032, driven by the expanding semiconductor industry. With major markets on the rise in countries such as China, South Korea, and Taiwan, significant investments in research and development, and an expanding need for advanced technological solutions, the market is expected to see continued expansion over the forecast period. The market is also highly varied and includes many types of IP solutions with varying degrees of hardness for both prototype and series production.

The Asia Pacific market environment remains relatively competitive with strategic partnerships forming to improve individual or multiple companies’ positions. On top of that, the market enjoys the benefits of the vast region as a production site for many Western semiconductor manufacturers, which are constantly looking for efficient and innovative solutions to widen their product development capacities and trim time-to-market. For Example, with companies such as TSMC, the world’s biggest contract chipmaker and one of the leading stimulus suppliers for the great advancement of cutting-edge chips, Taiwan has created the perfect conditions for the rapid development and implementation of specifically designed IPs.

KEY PLAYERS:

The key players in the Semiconductor Intellectual Property (IP) Market are Arm Holdings, Cadence Design Systems, CEVA, Rambus, Silicon Storage Technology, Analog Bits, Dream Chip Technologies GmbH, Faraday Technology Corporation, Renesas Electronics Corporation, Synopsys, Imagination Technologies, Lattice Semiconductor, Dolphin Design SAS, Eureka Technology, Open Five Inc, Micron Technology, Samsung, Dolphin integration and Other Players.

Recent Development

• In July 2024, Cadence released its latest Tensilica HiFi 5 DSP IP, optimized for audio and speech processing. The new IP enhances sound quality and supports advanced audio applications, benefiting consumer electronics and automotive sectors.

• In August 2024, Imagination Technologies launched the PowerVR Series9XT Graphics IP, providing exceptional graphics performance for next-generation gaming and multimedia devices. This IP offers high-resolution graphics and improved power efficiency.

• In April 2024, Dialog Semiconductor introduced its new SmartBond DA14531 Bluetooth Low Energy IP, designed for ultra-low-power IoT devices. This IP supports advanced connectivity features while extending battery life.