Semiconductor IP Market Size, Share and Trends Forecast to 2026

Posted by Steve Stark on February 23rd, 2022

The global semiconductor IP market is expected to grow from USD 5.5 billion in 2021 to USD 7.2 billion by 2026, at a CAGR of 5.4%.

Increasing the advancements for multicore technology across various sectors as well as rising demand for modern SoC (system on chip) designs for different applications are the primary factors driving the market growth. Moreover, growing adoption of semiconductor IPs in consumer electronics, telecommunications & data center as well as automotive verticals will drive the demand for this technology in the near future.

Driver: Advancements in multicore technology for consumer electronics vertical

The consumer electronics industry offers immense growth opportunities for the players operating in the semiconductor and semiconductor IP markets. The semiconductor industry’s growth is highly dependent on the sales of consumer electronics, such as smartphones, tablets, and memory as well as processor  products, as ICs and SoCs are being increasingly used in their manufacturing. The market for multicore processors is growing rapidly due to the advancements in personal computing for consumer electronics and the emergence of octa-core processors for smartphones. The growth of the multicore processor market is expected to create lucrative opportunities for the semiconductor IP market in the future. Presently, most portable consumer electronics operate on multicore (dual-core or quad-core) processors. These processors are helping companies to be competitive in the consumer electronics market by exhibiting fast, efficient, and error-free performance.

Restraint: Constant technological changes

Technology is an ever-changing concept, especially 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.

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

The companies in the automotive and telecommunications & data center verticals rely on highly sophisticated, complex electronic systems. In these industries, the demand for electronic and semiconductor components is rising, which has created the need for an innovative design solution for chip manufacturing. The applications of microprocessor units (MPUs), microcontroller units (MCUs), sensors, analog integrated circuits (ICs), interfaces, and memory are increasing in autonomous and premium cars. With the growing significance of connected cars, vehicle connectivity, and electronic mobility, the demand for small gadgets with high functionality and performance improvements is expected to rise in the automotive industry, which will create an opportunistic environment for the players operating in the semiconductor IP market.

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Challenge: IP thefts, counterfeits, and conflicts

IP counterfeiting, particularly the development of counterfeit components and system-level designs of IP cores, is the major threat for the current business models followed worldwide. Static random-access memory (static RAM or SRAM) FPGAs are most vulnerable to IP thefts and frequently fail to offer full functionality. However, nonvolatile flash and anti-fuse FPGAs are more secure against IP thefts than ASIC technologies, which are expected to substitute ASIC technologies. To resist IP thefts, industry experts recommend using nonvolatile flash and anti-fuse FPGAs.