The Global Semiconductor IP Market was valued at USD 4321.3 million in 2020 and is expected to reach USD 6923.2 million by 2026, registering a CAGR of 7.4%, during the period of 2021-2026. The initial phase of the COVID-19 outbreak was tough for the market vendors. However, in the second half of FY2020, countries, like the United States and China, started investing again in the semiconductor IP business. Since COVID-19 impacted multiple global markets yet, in very different ways, automotive, mobility, and civil aviation suffered drastically. Moreover, COVID-19 changed the perception of the global supply chain in manufacturing, where more localized value chains and regionalization have come into the picture. These are primarily done in order to minimize similar risks posed by the pandemic in the near future.
- The rising growth in wearable technology and the growing adoption of Internet of Things (IoT) are some of the major factors that augment the market growth.
- The market for Semiconductor IP (SIP) is witnessing rapid growth with the growing semiconductor sales. The market studied is entirely dependent on the semiconductor industry. The semiconductor business has been experiencing steady growth. However, growth is expected to be faced with several challenges. According to the Semiconductor Industry Association, the global semiconductor industry sales were in 2019 amounted to USD 412.1 billion in 2019, a decrease of 12.1% compared to the 2018 total. In spite of the policy challenges that led to the slowdown in the first half, sales recovered in the last two quarters. The semiconductor business is set to experience steady growth in 2020.
- According to WSTS, the semiconductor industry is expected to grow by 5.9% in 2020, which is a significant growth compared to the previous year's slump in demand. Owing to this, various semiconductor vendors are expected to increase their R&D budgets; for instance, Samsung's plan to invest USD 115 billion by 2030 to expand its share of the contract chip manufacturing market, out of which USD 63.1 billion is for boosting R&D.
- The SIP business practices include elements similar to those found in the traditional semiconductor or ASIC, EDA and design services markets. However, unlike the well-established business models in the ASIC and EDA industries, SIP business models tend to be more complex because several parties in the supply chain are involved with the successful deployment of commercial SIP in an IC design.
- While some uniformity in business practices and SIP business models has emerged, the industry has not yet standardized due to the wide variety of SIP product types, customer needs and frequent changes in EDA tools and process technologies.
- The rising design costs and the growing time-to-market pressure are forcing the organizations to seek services of semiconductor IP manufacturers. The various applications of this market include smart devices (mobiles and tablets), automotive, computers, and peripherals among others.
Key Market Trends
Consumer Electronics Account for a Dominant Market Share
- The consumer electronics segment is the dominant segment and has witnessed a very high demand over the last few years. Semiconductor IPs are used in every consumer electronic products, such as smartphones, tablet, and other devices. Because of the strong consumer demand for better and more advanced smartphones and devices, the demand for semiconductor IPs has increased.
- The major driver of this market includes emerging consumer devices adoption across the world, demand for connected devices coupled with the demand for advance SOC designs. The emerging technologies like embedded and programmable DSP IPs are expected to further drive the market in the future.
- In a smartphone, the incorporation of semiconductor IPs makes the device more efficient, smaller, and lightweight as the System-on-Chip concept is implemented over here. The System-on-Chip concept combines all the major components like the memory unit, the processor unit, and others being stored on a silicon chip, enabling the device to be more power efficient and more effective to use.
- The demand for tablets has seen a slight decrease over the last few years, because of its bulkier size compared to smartphones. But regardless, it remains a major segment that makes use of semiconductor IPs.
- There are high costs associated with the technology. The cost of its adoption is high due to which it has hampered the growth of this market.
North America expected to have a Significant Market Share
- The United States is one of the major markets in the overall semiconductor market, from vendors and end-user perspectives. The growing need for intelligent command and control in many industries in the United States presents essential market opportunities for many semiconductor manufacturers. For instance, Hitachi Ltd announced the merger of Hitachi America subsidiaries, Hitachi Semiconductor (America) Inc. and Hitachi Micro Systems Inc., to create a unified organization focused on the North American region, particularly the United States.
- Most of the market vendors are expanding their presence in the region. Furthermore, many market vendors are US-based, which provides a competitive advantage to the regional market. The US government is also playing a significant role in developing the regional semiconductor business, which is also supporting the semiconductor silicon IP market.
- Semiconductor development has faced a gap in access to domestic sources of capital, especially in pre-seed, seed, and early-stage rounds and later stages across the country. This led to a significant percentage of foreign ownership across Canadian companies. At the same time, a lack of funding created an unfavorable environment for Canadian companies to exit too early.
- Moreover, Canadian graduates are among the best STEM talent globally by being sought after by global semiconductor companies for well-paying, high-skilled jobs. As per Statistics Canada, 25% of all post-secondary enrollment was in computer and electronics-related programs in 2019. With Canada having a rich pool of technology talent, the Council wants to keep its domestic talent within.
- The US semiconductor industry has a significant place in the global market. The industry has witnessed significant growth even during the COVID-19 phase, supporting the market growth. According to the Semiconductor Industry Association (SIA), the US semiconductor industry directly employs nearly a quarter of a million workers in the country, and the US semiconductor companies’ sales totaled USD 208 billion in 2020.
The semiconductor(silicon) intellectual property market is consolidated with the presence of large-scale vendors that are capable of both backward and forward integration along with the presence of many players running the business in national and international territory. The major players are primarily adopting strategies like product innovation and mergers and acquisitions to stay ahead of the competition. The major players in the market are ARM Ltd, Synopsys Inc., Cadence Design Systems Inc., Imagination Technologies Ltd, CEVA Inc. among others.
- May 2021 - Cadence Design Systems, Inc. announced low-power IP for the PCI Express 5.0 specification that targets hyper-scale computing, networking, and storage applications that are made on TSMC N5 process technology. PCIe 5.0 technology consists of a PHY, companion controller, and Verification IP (VIP) targeted at SoC designs for very high bandwidth to suit the applications.
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1.2 Scope of the Study
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 Growing Demand for Connected Devices
4.3.2 Growing Demand for Modern SoC Designs
4.4 Market Restraints
4.4.1 IP Business Model and Economies of Scale
4.5 Industry Attractiveness - Porter's Five Force Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Industry Value Chain Analysis
4.7 Assessment of Impact of COVID-19 on the Market
5.2 IP Type
5.2.1 Processor IP
5.2.2 Wired and Wireless Interface IP
5.2.3 Other IP Types
5.3 End User Vertical
5.3.1 Consumer Electronics
5.3.2 Computers and Peripherals
5.3.5 Other End User Verticals
5.4.1 North America
18.104.22.168 United states
22.214.171.124 United Kingdom
126.96.36.199 Rest of Europe
5.4.3 Asia Pacific
188.8.131.52 South Korea
184.108.40.206 Rest of Asia Pacific
5.4.4 Rest of the World
6.1.1 Faraday Technology Corporation
6.1.2 Fujitsu Ltd
6.1.3 Mindtree Limited
6.1.4 ARM Ltd ( SoftBank )
6.1.5 Synopsys Inc.
6.1.6 Cadence Design Systems Inc.
6.1.7 CEVA Inc.
6.1.8 Andes Technology Corporation
6.1.9 MediaTek Inc.
6.1.10 Digital Media Professionals
6.1.11 Imagination Technologies Ltd
6.1.12 VeriSilicon Holdings Co., Ltd
6.1.13 Achronix Semiconductor Corporation
6.1.14 Rambus Incorporated
6.1.15 eMemory Technology Inc.
6.1.16 Wave Computing, Inc.
A selection of companies mentioned in this report includes:
- Faraday Technology Corporation
- Fujitsu Ltd
- Mindtree Limited
- ARM Ltd ( SoftBank )
- Synopsys Inc.
- Cadence Design Systems Inc.
- CEVA Inc.
- Andes Technology Corporation
- MediaTek Inc.
- Digital Media Professionals
- Imagination Technologies Ltd
- VeriSilicon Holdings Co., Ltd
- Achronix Semiconductor Corporation
- Rambus Incorporated
- eMemory Technology Inc.
- Wave Computing, Inc.