The global semiconductor IP (SIP) market, valued at US$
7.1 billion in 2023, is poised for significant growth, driven by
technological advancements and increasing adoption across various industries.
Projected to grow at a CAGR of 5.9% from 2024 to 2034, the market is
estimated to reach US$ 13.5 billion by the end of the forecast period.
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Analyst Insights: Key Growth Drivers
Increasing Demand for AI-Based Applications
The rapid growth of artificial intelligence (AI) is a
major factor boosting the semiconductor IP market. AI applications,
particularly those relying on deep learning (DL) and machine learning
(ML), are increasingly integrated into automotive, consumer
electronics, and IoT devices. These applications demand advanced IP
cores to support compute-intensive methodologies and robust chip
designs.
- Neural
Network Processing (NNP): R&D in neural network algorithms has
driven the need for AI System-on-Chips (SoCs) with enhanced processing,
memory, and connectivity capabilities. These architectures integrate
on-chip neural networks, opening up new avenues for investment in
semiconductor technologies.
- Customized
IP Solutions: Companies are designing tailored IP cores to meet the
unique demands of AI-based applications, further propelling market
expansion.
Government Initiatives in Defense Modernization
Governments worldwide are investing in the modernization of defense
technologies, creating a surge in demand for reliable semiconductor IP
solutions. Semiconductors play a critical role in advanced defense systems, and
security concerns necessitate robust IP designs.
- Hardware
Root of Trust (HRoT): HRoT ensures secure operations by embedding key
cryptographic operations and secure boot processes within SoCs.
Technologies such as Physical Unclonable Functions (PUF) are
increasingly being adopted for enhanced security.
- Encryption
and Decryption: Semiconductor IPs now support data security through
cryptographic algorithms like AES, RSA, and ECC,
making them indispensable for sensitive defense and communication systems.
Commercialization of Captive IP
Key players in the semiconductor IP market are adopting
innovative business models to commercialize captive IP previously
developed by large semiconductor and systems firms. This trend is helping
monetize IP assets that were traditionally underutilized, driving further
growth in the market.
Regional Dynamics
North America: Leading the Charge
In 2023, North America emerged as the dominant region
in the semiconductor IP market, driven by significant investments in
semiconductor manufacturing and heightened concerns over IP theft. The CHIPS
and Science Act passed in the U.S. in 2022 is expected to catalyze further
growth in this region by boosting domestic semiconductor production.
Asia Pacific: Rising Powerhouse
Asia Pacific, with its two-thirds share of global
semiconductor sales, is a key market for semiconductor IP. China,
the largest manufacturer and user of semiconductors, continues to play a
pivotal role. Increased production and demand in the region are driving market
dynamics, alongside the spread of fabrication activities in countries like Taiwan,
South Korea, and Japan.
Competitive Landscape
The semiconductor IP market is characterized by intense
competition, with major players focusing on ASIC and FPGA IP licensing, patent
portfolios, and innovative product developments. Notable companies
include:
- Arm
Limited
- Rambus
- Synopsys,
Inc.
- Cadence
Design Systems, Inc.
- Taiwan
Semiconductor Manufacturing Company Limited
These firms are leveraging their expertise to meet the
evolving demands of industries ranging from automotive to consumer
electronics and defense.
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