Semiconductor IP Market Grows at 6.8% CAGR, Reaching $12.3 Bn by 2032: Persistence Market Research

The semiconductor intellectual property (IP) market plays a crucial role in driving the modern electronics industry, offering pre-designed building blocks or cores for semiconductor designs. As the demand for integrated circuits (ICs) and system-on-chip (SoC) designs continues to grow, the semiconductor IP market is rapidly expanding. Semiconductor IP is used across several industries, including telecommunications, automotive, consumer electronics, and data centers. The market is expected to see significant growth, driven by technological advancements, demand for efficient chips, and the increasing use of semiconductor IP in high-performance applications.

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Overview of the Semiconductor IP Market

The semiconductor intellectual property market has experienced substantial growth over the years. In 2021, the global semiconductor IP market reached a revenue of approximately USD 5.9 billion, and it is projected to grow to USD 12.3 billion by 2032, expanding at a compound annual growth rate (CAGR) of 6.8% from 2022 to 2032. This growth is largely attributed to the rise in demand for System on Chip (SoC) designs, which integrate multiple semiconductor functions into a single chip. In addition, industries such as telecommunications, consumer electronics, and automotive have led the charge, with their increasing reliance on high-performance semiconductors.

The market is expected to be particularly driven by the growing use of advanced semiconductor designs like Application-Specific Integrated Circuits (ASICs), which are designed for specific applications rather than general-purpose use. Furthermore, as the demand for connected devices and the 5G technology boom continues, semiconductor IP will be in greater demand to support innovations. The automotive sector is also contributing significantly to market growth, with semiconductor components now being used for a variety of applications such as autonomous driving, vehicle connectivity, and infotainment systems.

Key Highlights from the Report

➤ Global semiconductor IP market size was USD 5.9 billion in 2021.

➤ The market is projected to reach USD 12.3 billion by 2032.

➤ The market is growing at a 6.8% CAGR from 2022 to 2032.

➤ Semiconductor IP accounts for nearly 2% of the global semiconductor market.

➤ Telecommunication, consumer electronics, and automotive industries are major drivers of growth.

➤ Asia-Pacific is expected to be the fastest-growing region for semiconductor IP demand.

Market Segmentation of Semiconductor IP

The semiconductor IP market can be segmented based on various categories such as product type, end-user industry, and region. Understanding these segments helps in identifying the core areas where the market is growing and evolving.

By Product Type:
The market can be divided into several segments based on the type of intellectual property provided. These include design IP, processor IP, interface IP, graphics IP (GPU IP), memory IP, and verification IP. Among these, the processor IP segment is anticipated to witness the highest demand due to its critical role in the design of chips for 5G, automotive, and consumer electronics applications. The licensing IP source segment, which involves licensing pre-designed IPs for use in different semiconductor devices, is also a significant contributor to market growth.

By End-User Industry:
The primary end-user industries for semiconductor IP are consumer electronics, telecommunications, automotive, defense, and data centers. The automotive sector is witnessing an increasing demand for semiconductor IP due to the rising use of microprocessor units (MPUs), microcontroller units (MCUs), and sensors for autonomous vehicles and electric vehicles (EVs). The telecommunication industry is experiencing growth in the deployment of 5G networks, which significantly boosts the demand for advanced semiconductor IP solutions.

Regional Insights into Semiconductor IP Demand

North America:

North America is one of the dominant regions in the semiconductor IP market, with the United States playing a pivotal role in its growth. The U.S. houses some of the largest semiconductor companies like Qualcomm, Nvidia, and Intel, which extensively use semiconductor IP in their products. The country's advanced telecommunication infrastructure, electronics industry, and increasing investments in 5G technology contribute to the robust demand for semiconductor IP. It is projected that by 2032, the U.S. semiconductor IP market will account for nearly 77% of the North American market share.

Asia-Pacific:

Asia-Pacific, particularly South Asia, is expected to witness the highest growth in the semiconductor IP market. Countries like India, China, and South Korea are rapidly expanding their automotive, telecommunications, and data center industries, which require advanced semiconductor technologies. The automotive sector in India is growing at an impressive rate, with an increasing demand for advanced driver-assistance systems (ADAS) and electric vehicles. Additionally, China is expected to lead the way with massive investments in semiconductor manufacturing and 5G technology, further fueling the region's semiconductor IP market.

Market Drivers

The semiconductor IP market is primarily driven by several key factors, including the growing demand for high-performance chips, system on chips (SoCs), and ASICs in various industries. The 5G revolution, with its demand for faster data transmission, high bandwidth, and low latency, is a significant driver of the semiconductor IP market. The automotive industry is also a major contributor to market growth, as electric vehicles (EVs) and autonomous driving technologies increasingly rely on advanced semiconductor components.

Another important driver is the surging demand for connected devices, including smartphones, wearables, and IoT devices. These devices require efficient chip designs to meet the demands for processing power, memory, and energy efficiency. Moreover, the defense sector is seeing a rise in the adoption of compound semiconductors for use in electronic warfare and communications systems, further driving the demand for semiconductor IP solutions.

Market Restraints

Despite the growth prospects, the semiconductor IP market faces several challenges. Intellectual property theft and counterfeit IP remain major issues, particularly in regions where intellectual property laws are not strictly enforced. Geopolitical tensions, such as those between the U.S. and China, can disrupt global supply chains and impede the growth of the semiconductor IP market.

Additionally, the high cost of semiconductor IP and the complexity of semiconductor design can be prohibitive for smaller companies or startups. This could limit market entry and growth for smaller players, leaving the market dominated by a few major companies with substantial R&D budgets. Supply chain disruptions, particularly in the wake of the COVID-19 pandemic, have also contributed to delays in semiconductor manufacturing, which could hamper the demand for IP.

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Market Opportunities

The growth in 5G networks presents a significant opportunity for the semiconductor IP market. As 5G networks require more advanced chipsets with greater processing power and efficiency, there is a growing demand for high-quality semiconductor IP. AI-powered applications and cloud computing are also areas where semiconductor IP is in high demand, as these technologies require powerful and efficient chips to support their computational needs.

The automotive industry presents another lucrative opportunity, particularly as electric vehicles and autonomous driving technologies continue to evolve. With the increasing adoption of advanced driver-assistance systems (ADAS), vehicle-to-everything (V2X) communication, and other semiconductor-based solutions, the demand for automotive semiconductor IP is expected to skyrocket. Additionally, emerging markets in South Asia, Africa, and Latin America offer new growth opportunities for semiconductor IP players as these regions continue to expand their tech infrastructure.

Frequently Asked Questions (FAQs)

➤ How big is the semiconductor intellectual property market?

➤ Who are the key players in the global semiconductor IP market?

➤ What is the projected growth rate of the semiconductor IP market?

➤ What is the market forecast for the semiconductor IP market by 2032?

➤ Which region is estimated to dominate the semiconductor IP market through the forecast period?

Company Insights

The following companies are key players in the semiconductor IP market:

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

Recent Developments

■ In April 2021, Nvidia launched its Ampere architecture GPUs, which support next-generation desktops, laptops, and servers, improving remote work capabilities.

■ In January 2021, CEVA, Inc. entered a commercial partnership with DARPA Toolbox, aimed at advancing technology innovation and enhancing product performance in semiconductor IP.

By 2032, the semiconductor intellectual property market is poised for a remarkable transformation, driven by technological innovations, strong demand from diverse industries, and the increasing importance of semiconductor designs in next-generation technologies.

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