Semiconductor Intellectual Property (IP) Market Competitive Dynamics & Global Outlook 2025

Semiconductor IP (Intellectual Property) is a reusable unit of architectural layout of semiconductor logic, chip or cell in electronics and semiconductor sector. It allows manufacturers to design chips faster using existing blocks. IP cores manufactured by third parties are licensed to semiconductor chip manufacturers or they can be developed and owned by a single chip manufacturer alone. Semiconductor IP is used as elementary unit within semiconductor chips such as application specific integrated chips (ASIC) designs or field programmable gate array (FPGA) logic to add various features as per the required design. Various IP customers are foundries, fabless firms and integrated device manufacturers (IDM). Different type of integrated chips such as system-on-chips and advanced ICs integrate a great variety of advanced functionality into a single device to offer superior performance, with ever more IP cores on a single chip. Semiconductor companies are dynamically subcontracting the IP design and development activities not core to the product. Semiconductor IPs are mostly used in all semiconductor application, including consumer sector, telecommunication, medical, automotive and defense sectors.

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Semiconductor IP improves design efficiency at advanced design processes and reduces manufacturing and designing cost. With relatively slower growth in the overall semiconductor market, cost management has gained focus, enhancing the growth prospects of third-party IP vendors. Market for semiconductor intellectual property (IP) is expanding rapidly in terms of both scope and popularity at a growth rate higher to semiconductor market itself. Software semiconductor IP market is expected to grow more as compared to hardware IP as software modules helps in reducing the size of products. Increase in demand of electronic devices such as mobiles and tablets is likely to foster the global market growth. Emerging demand for innovative products will lead original equipment manufacturers (OEMs) to assimilate advance technologies providing functionality such as optimization between performance and power consumption at efficient price, better storage, larger displays, rapid processing speed, and higher perseverance. Such advanced functions increase the complexity of mobile system on chip (SOC) due to which SOC designers use semiconductor IPs from third-party in order to reduce the associated risk, thereby enhancing the semiconductor IP market growth potential. The growing presence of third-party IP vendors and increase in licensing of software with semiconductor IP by several key players is projected to drive market expansion during the forecast period. Other factors such as increased funding from governments and investors, emerging technologies such as IOT and embedded and programmable DSP IPs, continuously improving automotive sector and increase in demand of diminished devices are expected to drive the market

The shift in technology is anticipated to restrain the growth of the semiconductor IP market. This is because, any change in the process node, used in designing chips in the semiconductor IPs, changes the design complexity, IP core design architecture and chip form factor. Block- based vendor instability and expensive designing costs with each process generation is becoming challenge for companies, subsequently restricting the market growth.

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Market can be segmented on the basis of geographic regions, applications, design architecture, form factor and type. On the basis of geography, the regions are segmented into North America, Asia Pacific (APAC), South America, Middle East & Africa (MEA) and Europe. Asia Pacific region is fastest growing market due to increasing use of electronics in countries like India, China and Japan. On the basis of applications, market is segmented as healthcare, IT and Telecom, automotive and electronics. On the basis of architectural design market can be segmented into hard IP, firm IP and soft IP. On the basis of form factor, market can be segmented into SoC (System on Chip) IP and Integrated circuit IP. On the basis of type, market is classified into digital IP, physical IP, and processor IP.

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