The semiconductor (silicon) intellectual property market has registered a CAGR of 11.48% during the forecast period (2021-2026). 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.
United States expected to have a Significant Market Share
- The growing need for intelligent command and control in many industries in United States is presenting important market opportunities for many superconductor memory manufacturers. For instance, Hitachi, Ltd. and its subsidiary Hitachi America, Ltd., announced the merger of Hitachi America subsidiaries Hitachi Semiconductor (America) Inc., Brisbane, Calif., and Hitachi Micro Systems Inc., San Jose, Calif., to create a unified organization focused on the design, development and marketing of large-scale integrated semiconductor systems to focus greater resources on building a systems solution business in North America, while consolidating high-volume semiconductor production to a unified operating base to achieve greater operating efficiencies.
- According to SEMI, growth of semiconductor market sufferered(0.9% lower than the final September 2018 level of USD 2.07 billion, and is 2.0% higher than the October 2017 billings level of USD 2.02 billion), Although the growth rate has suffered but it is expected to rise due to the increased demand of DRAMS as the most efficient semiconductor memory type.
- For instance, According to the Semiconductor Industry Association (SIA), the semiconductor industry directly employs nearly a quarter of a million workers in the US, and U.S. semiconductor company sales totaled USD 193 billion in 2019. According to the World Semiconductor Trade Statistics, in December 2019, semiconductor sales in the Americas amounted to USD 7.49 billion.
- The recent outbreak of COVID-19 has led to factory shutdowns. China consumes around 40%-50% of global semiconductor output, for both domestic consumption and assembly bound for export.
- Hence, semiconductor firms in the US have high revenue exposure to China. And factory shutdowns or underutilization of production facilities could lead to order cuts and, in turn, fewer or delayed sales, which would effect the market for semiconductor IP in the region.
The semiconductor(silicon) intellectual property market is highly competitive and is mildly concentrated and is moving toward fragmented stage because of 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 acquisition to stay ahead of the competition. The major players in the market are Fujitsu Ltd, Mindtree Limited, ARM Ltd, Synopsys Inc., Cadence Design Systems Inc. among others.
- Oct 2020 - Cadence Design Systems, Inc. announced Cadence System-Level Verification IP (System VIP), a new suite of tools and libraries for automating system-on-chip (SoC) testbenchassembly, bus and CPU traffic generation, cache-coherency validation and system performance bottleneck analysis. Using Cadence System VIP, customers creating complex hyperscale, automotive, mobile and consumer chips can improve chip-level verification efficiency by up to 10X.
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1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
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 Assessment of Impact of COVID-19 on the Industry
5 MARKET SEGMENTATION
5.1 Revenue Type
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
22.214.171.124 United states
126.96.36.199 United Kingdom
188.8.131.52 Rest of Europe
5.4.3 Asia Pacific
184.108.40.206 South Korea
220.127.116.11 Rest of Asia Pacific
5.4.4 Rest of World
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles*
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.
7 INVESTMENT ANALYSIS
8 FUTURE OF THE MARKET
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.