Semiconductor IP Market to Witness Twofold Growth by 2032, Reports Persistence Market Research

The global semiconductor intellectual property (IP) market has emerged as a critical enabler of innovation in modern electronics, providing foundational technology that accelerates chip development and time-to-market. In 2021, the market generated revenue of approximately US$ 5.9 billion, and it is projected to nearly double, reaching around US$ 12.3 billion by 2032. This growth represents a robust compound annual growth rate (CAGR) of 6.8% over the forecast period (2022-2032).

Key drivers behind this rapid expansion include the escalating demand for System-on-Chip (SoC) designs, the proliferation of connected devices, increasing chip complexity, and the need for reusable IP blocks to streamline semiconductor design cycles. The processor IP segment leads the market due to its central role in powering 5G, AI, and automotive applications. Geographically, South Asia & Pacific is expected to be the fastest-growing region, driven by booming automotive, telecommunications, and data center investments. Conversely, North America, led by the U.S., maintains its position as a leading region due to its established semiconductor ecosystem and growing investments in fabless semiconductor companies.

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Key Highlights from the Report

✦ The global semiconductor IP market is projected to grow at a 6.8% CAGR from 2022 to 2032.
✦ The market size will increase from US$ 5.9 Bn in 2021 to US$ 12.3 Bn by 2032.
✦ Processor IPs remain the top revenue-generating segment in the market.
✦ South Asia & Pacific is forecasted to be the fastest-growing regional market.
✦ Demand for ASIC and SoC designs is fueling the growth of semiconductor IP usage.
✦ The U.S. dominates the North American market with nearly 77% regional share.

Market Segmentation

The semiconductor intellectual property market is segmented based on design IP, IP source, and end-use industry. Among design types, processor IP holds the dominant share due to its pivotal role in delivering computing power to various connected devices, especially in the context of 5G, AI, and automotive applications. ASIC IP, memory IP, and interface IP are also gaining traction as semiconductor functionality becomes more complex.

When analyzed by IP source, licensing IPs lead the market. Licensing models allow companies to monetize IP blocks by selling design rights to multiple chip manufacturers, thereby enabling scalability and faster market adoption. The royalty model is also significant, offering vendors recurring revenue streams based on units sold by the licensee.

In terms of end-use, consumer electronics, telecommunications, automotive, and industrial sectors dominate IP consumption. The rising integration of smart systems and the move toward Industry 4.0 have created surging demand for IP cores in embedded and edge devices. Healthcare and defense sectors are also increasingly relying on semiconductor IPs to meet their growing need for high-performance and specialized computing solutions.

Regional Insights

North America, particularly the United States, continues to lead the semiconductor IP market. The U.S. alone accounts for nearly 77% of the North American market, driven by the presence of industry leaders such as Intel, Qualcomm, and Nvidia, along with a large number of fabless companies and a robust R&D infrastructure.

Europe, with Germany as its focal point, is a major market owing to its automotive industry. Germany's push toward autonomous vehicles and its leadership in advanced automotive electronics contribute significantly to semiconductor IP demand.

South Asia & Pacific is the fastest-growing regional market, expected to expand by 2.5X during the forecast period. Countries like India are capitalizing on low-cost manufacturing and increasing investments in semiconductor R&D. The growth of electronics, telecom, and automotive industries in this region is fueling the adoption of advanced semiconductor IP solutions.

East Asia, home to semiconductor manufacturing giants like South Korea, Japan, and China, also holds a substantial share of the global IP market, supported by heavy investments in memory technologies and advanced chip manufacturing.

Market Drivers

A key driver for the semiconductor IP market is the increasing complexity of chip designs. As more functionalities are integrated into single chips through SoC architectures, the demand for reusable, verified IP cores has surged. Companies are turning to IP providers to reduce development time and cost while ensuring compliance with rigorous performance and reliability standards.

Another significant factor is the rising popularity of ASICs (Application-Specific Integrated Circuits). ASICs offer customized performance advantages in applications such as cryptocurrency mining, medical devices, and military systems. These applications require high-performance, power-efficient chips, making IP blocks essential for scalable production.

The expanding footprint of 5G, AI, and edge computing technologies also boosts IP adoption. Processor and interface IPs are critical in supporting the data processing and bandwidth requirements of next-generation networks and devices.

The defense sector is increasingly incorporating compound semiconductors for radar, communications, and electronic warfare systems. Although volumes in this segment are lower than consumer electronics, the higher price points contribute meaningfully to market revenue.

Market Restraints

Despite its growth trajectory, the semiconductor IP market faces several constraints. One significant challenge is IP infringement and security risks. The digital nature of IP makes it vulnerable to unauthorized use, cloning, or reverse engineering, especially in less regulated markets.

Another restraint is the high cost and complexity of IP verification and integration. Ensuring compatibility with evolving semiconductor standards and technologies requires substantial investment in design validation, simulation, and debugging. For smaller companies, these costs can act as a deterrent to adopting third-party IPs.

Moreover, vendor lock-in poses another challenge. Companies that rely heavily on a single IP provider may face limitations in design flexibility and scalability, as well as increased risk in case of supply chain disruptions.

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Market Opportunities

The market holds immense opportunities in emerging economies, particularly in India, Malaysia, and Vietnam, where increasing investments in chip fabrication and design centers are anticipated to create long-term demand for IP cores.

The continued evolution of AI and machine learning presents another major growth avenue. Semiconductor IPs are essential in accelerating neural network computations, enabling inference at the edge, and reducing power consumption in AI-enabled devices.

Another opportunity lies in the automotive sector, especially with the rise of electric and autonomous vehicles. From ADAS (Advanced Driver Assistance Systems) to infotainment and V2X communication systems, IP cores are increasingly embedded into automotive chips for safety, performance, and energy efficiency.

Finally, the transition to 3nm and 2nm process nodes will require advanced IP solutions that can function reliably in ultra-small geometries. This creates a demand for IP innovation and opens the door for new entrants offering specialized core designs optimized for next-gen semiconductor nodes.

Reasons to Buy the Report

✔ Gain a comprehensive understanding of current market trends and projections through 2032.
✔ Identify high-growth regions and segments to tailor investment and expansion strategies.
✔ Evaluate competitor positioning and technological innovation within the IP ecosystem.
✔ Access detailed insights into market drivers, restraints, and emerging opportunities.
✔ Leverage company profiling and recent developments for strategic planning and partnerships.

🏢 Company Insights

• Arm Ltd
• Imagination Technologies
• Cadence Design Systems
• Ceva Inc
• Nvidia Corporation
• Rambus Inc
• Qualcomm Technologies Inc.
• Takumi Corporation
• TES Electronic Solutions GmbH
• VeriSilicon/Vivante
• Digital Media Professionals

Recent Developments:

In April 2021, Nvidia introduced its Ampere architecture GPUs to support high-end computing for desktop, laptop, and server applications, enabling high-performance remote work solutions.

In January 2021, CEVA Inc. entered into a commercial partnership with DARPA Toolbox, strengthening its innovation capacity in advanced semiconductor design and boosting product efficiency.

🧾 Conclusion

The semiconductor intellectual property market is positioned for long-term growth, supported by increasing SoC complexity, technological advancements, and the growing integration of electronics in everyday life. As industries transition toward more intelligent and connected systems, the role of verified, reusable IP blocks becomes ever more crucial. While challenges such as IP theft and integration costs persist, the opportunities far outweigh these restraints. Emerging economies, AI, 5G, and automotive electronics represent the future of this sector, making semiconductor IP an essential pillar of innovation across industries. Investing in this market today could yield significant returns as the digital transformation of the global economy continues to accelerate.

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