Global semiconductor intellectual property market is estimated to be valued at US$ 7.3 Billion in 2024. Demand is expected to reach US$ 14.5 Billion by 2031, exhibiting a compound annual growth rate (CAGR) of 10.3% from 2024 to 2031.
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There is an increasing demand for technologically advanced electronic devices across different industries such as consumer electronics, automotive, telecommunication, and others. The rising penetration of smartphones, tablets and other connected devices is driving the need for specialized (Intellectual Property) IPs. Moreover, the evolution of advanced technologies such as 5G networks, artificial intelligence, augmented reality, and Internet of Things is further fueling market growth.
The implementation of advanced node sizes in chip manufacturing is also propelling semiconductor foundries to focus on developing specialized IPs. Leading players are investing heavily in R&D to develop innovative IPs which can help them gain a competitive advantage in the market. However, high costs associated with IP development and ongoing modifications as per technological advancements pose a major challenge to market growth.
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Insights By Design IP: Advancing Technology Drives Demand for Processor IP
In the terms of Design IP, the processor IP segment is estimated to hold the highest share of the market of 44.4% in 2024 owing to continuous technological advancements in processors. The exponential growth in data and connectivity needs has pushed semiconductor companies to develop more powerful and efficient processors. As the complexity and performance of processors increase with each generation to support applications such as AI, machine learning and IoT, the demand for sophisticated Processor IP is also rising.
Insights By Design IP: Advancing Technology Drives Demand for Processor IP
The Royalty segment is estimated to hold the highest share of the market of 54.2% in 2024 as IP reuse becomes more pervasive in the semiconductor industry. As semiconductor designs grow exponentially complex, reusing pre-verified and well-designed IP blocks through licenses and royalty agreements has emerged as an economically prudent strategy for chip companies. It helps them focus internal engineering efforts on innovation while leveraging the expertise of IP vendors.
Insights By IP Core: Leveraging Soft cores' Adaptability and Portability
The Soft-core segment is estimated to dominate the market share of 43.1% in 2024 owing to its adaptability and portability across various semiconductor fabrication processes and technologies. Soft cores facilitate seamless integration into ASIC/FPGA devices from different vendors since they do not target a particular fabrication technology or architecture. This gives chip designers ample flexibility to experiment with IP in early stages of their projects and port it across existing or future fabrication nodes during product evolution.
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Regional Analysis: Global Semiconductor Intellectual Property Market
Dominating Region: North America
North America is expected to account for the greatest revenue share, with 43.4% in 2024 North America’s dominance in the semiconductor intellectual property market can be attributed to the strong presence of leading tech companies and semiconductor designers in the region. Countries like the U.S. are home to global players that drive significant innovation through R&D investments. Supportive government policies have also encouraged development of indigenous semiconductor technologies.
Fastest-growing Region: Asia Pacific
Asia Pacific region exhibits the fastest growth in the global market. Aggressive strategies adopted by governments to indigenous manufacturing and global companies to expand in emerging countries are contributing to accelerated adoption. In addition, growing electronics demand from a burgeoning consumer base is propelling the market higher.
Semiconductor Intellectual Property Market Outlook for Key Regions
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Top Strategies Followed by Global Semiconductor Intellectual Property Market Players
Emerging Startups in the Global Semiconductor Intellectual Property Market
Innovative Technologies: Examples - Startups are developing innovative technologies like intelligent sensors, decision support systems, and AI/ML integrated solutions. Companies like Anthropic and Anthropic are leveraging AI to build advanced semiconductor design tools.
Sustainable Solutions: Examples - Some startups are focusing on sustainability. Chemistry11 is developing eco-friendly materials for semiconductors while LinearGrid recycles cleanroom waste to build new tools. Recovering resources reduces environmental footprint.
Market Contribution: Niche Markets - Startups often address niches overlooked by bigger players. Deep Scene focuses on AI for autonomous vehicles, targeting a growing market. Another upcoming player is tackling smart infrastructure needs.
The global semiconductor intellectual property market appears promising over the next five years. Rapid technological advancements in industries like automotive, consumer electronics and IoT are expected to drive higher semiconductor content and design complexities.
While higher adoption of advanced nodes below 10nm could open up incremental opportunities, higher R&D investments and more frequent design cycles may strain the budgets of some players. The threat of IP theft and complications arising from the use of third-party IPs can also deter certain companies. However, the rising contract design activities are likely to open up new demand streams for commercial IP vendors. Collaborations between big technology companies may further fuel innovation and demand. The growing need for power-efficient AI/ML functionality is another area of focus.
Semiconductor Intellectual Property Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2023 | Market Size in 2024: | US$ 7.3 Bn |
Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
Forecast Period 2024 to 2031 CAGR: | 10.3% | 2031 Value Projection: | US$ 14.5 Bn |
Geographies covered: |
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Segments covered: |
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Companies covered: |
Arm Holdings, Synopsys, Inc., Cadence Design Systems, Inc., Imagination Technologies Limited, Lattice Semiconductor Corporation, CEVA, Inc., Rambus Incorporated, Silvaco Inc., Intel Corporation, eMemory Technology Inc., Dream Chip Technologies GmbH (Goodix Technology Co. Ltd.), and VeriSilicon Microelectronics (Shanghai) Co., Ltd. |
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Growth Drivers: |
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Restraints & Challenges: |
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Market Driver - Increasing Demand for Semiconductor Intellectual Property (IP) in the Automotive Industry
The growth of semiconductor intellectual property in the automotive industry is due to increasing application of microcontroller units (MCUs), microprocessor units (MPUs), sensors, interfaces, analog integrated circuits (ICs), and memory products in autonomous and premium cars
For instance, in July 2020, Imagination Technologies announced that NXP, the leading automotive semiconductor supplier, has extended its license for Imagination’s Ethernet Packet Processor (EPP) IP for use in S32 vehicle network processors.
Market Challenge - Increased susceptibility to counterfeiting
While higher adoption of advanced nodes below 10nm could open up incremental opportunities, higher R&D investments and more frequent design cycles may strain the budgets of some players. The threat of IP theft and complications arising from the use of third-party IPs can also deter certain companies. However, the rising contract design activities are likely to open up new demand streams for commercial IP vendors. Collaborations between big technology companies may further fuel innovation and demand. The growing need for power-efficient AI/ML functionality is another area of focus.
Market Opportunity - Artificial Intelligence Hardware: New Opportunities for Semiconductor Companies
Artificial Intelligence is offering lucrative opportunities for semiconductor companies. Semiconductor companies have benefited from increased digitization and cloud usage across various industries such as healthcare, telecom, and automotive which has accelerated chip demand.
Rising demand for chips due to growing use of Artificial Intelligence (AI) will contribute significantly to the industry’s overall growth. Much of that demand is coming from the automotive and industrial markets, the two fastest-growing segments. The industrial market continues to be driven by increasing demand for AI chips in both security and healthcare sectors.
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About Author
Pooja Tayade
Pooja Tayade -is an experienced management consultant with a strong background in the Semiconductors and Consumer Electronics industries. Over the past 9 years, she has helped leading global companies in these sectors optimize their operations, drive growth, and navigate complex challenges. She He has led successful projects that delivered significant business impact, such as:
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