Semiconductor (Silicon) Intellectual Property Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Semiconductor (Silicon) Intellectual Property Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Semiconductor (Silicon) Intellectual Property Market is expected to register a CAGR of 7.38% during the period. The initial phase of the COVID-19 outbreak was tough for the market vendors. However, in the second half of FY2020, countries, like the United States and China started investing again in the semiconductor IP business. Since COVID-19 impacted multiple global markets in very different ways, automotive, mobility, and civil aviation suffered drastically.

Moreover, COVID-19 changed the perception of the global supply chain in manufacturing, where more localized value chains and regionalization have come into the picture. These are primarily done in order to minimize similar risks posed by the pandemic in the near future.

Key Highlights

• The rising growth in wearable technology and the growing adoption of the Internet of Things (IoT) are some of the major factors that augment the market's growth.
• Semiconductor IP (SIP) market is witnessing rapid growth with the growing semiconductor sales. The market studied is entirely dependent on the semiconductor industry. The semiconductor business has been experiencing steady growth. However, growth is expected to be faced with several challenges.
• The global semiconductor sector generated revenues of 50.9 billion USD in April 2022, up 21.1 percent from USD 42.0 billion in April 2021 and 0.7% from USD 50.6 billion in March 2022, according to the Semiconductor Industry Association. In 2020, the semiconductor industry was anticipated to increase steadily. For 13 straight months, global semiconductor sales climbed by over 20% year over year, demonstrating consistently strong and rising demand for semiconductors across a number of crucial industries.
• According to WSTS, the semiconductor industry is expected to grow by 5.9% in 2020, which is a significant growth compared to the previous year's slump in demand. Owing to this, various semiconductor vendors are expected to increase their R&D budgets; for instance, Samsung plans to invest USD 115 billion by 2030 to expand its share of the contract chip manufacturing market, out of which USD 63.1 billion is for boosting R&D.
• The SIP business practices include elements similar to those found in the traditional semiconductor or ASIC, EDA, and design services markets. However, unlike the well-established business models in the ASIC and EDA industries, SIP business models tend to be more complex because several parties in the supply chain are involved with the successful deployment of commercial SIP in an IC design.
• While some uniformity in business practices and SIP business models has emerged, the industry has not yet standardized due to the wide variety of SIP product types, customer needs, and frequent changes in EDA tools and process technologies.
• The rising design costs and the growing time-to-market pressure are forcing organizations to seek the services of semiconductor IP manufacturers. The various applications of this market include smart devices (mobiles and tablets), automobiles, computers, and peripherals, among others.

Key Market TrendsConsumer Electronics Account for a Dominant Market Share

• The consumer electronics segment is the dominant segment and has witnessed a very high demand over the last few years. Semiconductor IPs are used in every consumer electronic product, such as smartphones, tablets, and other devices. Because of the strong consumer demand for better and more advanced smartphones and devices, the demand for semiconductor IPs has increased.
• The major driver of this market includes emerging consumer device adoption across the world, demand for connected devices coupled with the demand for advanced SOC designs. Emerging technologies like embedded and programmable DSP IPs are expected to drive the market in the future further.
• In a smartphone, the incorporation of semiconductor IPs makes the device more efficient, smaller, and lightweight as the System-on-Chip concept is implemented over here. The System-on-Chip concept combines all the major components like the memory unit, the processor unit, and others being stored on a silicon chip, enabling the device to be more power efficient and more effective to use.
• The demand for tablets has seen a slight decrease over the last few years because of their bulkier size compared to smartphones. But regardless, it remains a major segment that makes use of semiconductor IPs.
• There are high costs associated with the technology. The cost of its adoption is high, due to which has hampered the growth of this market.

North America Expected to have a Significant Market Share

• The United States is one of the key markets in the global semiconductor market, from vendors' and end-user perspectives. Various American sectors now require intelligent command and control, which offers significant market prospects for many semiconductor makers. For instance, Hitachi Ltd announced the merging of Hitachi America subsidiaries Hitachi Semiconductor (America) Inc. and Hitachi Micro Systems Inc. to form a consolidated company centered in the North American region, especially the United States.
• Most of the market vendors are expanding their presence in the region. Furthermore, many market vendors are US-based, which provides a competitive advantage to the regional market. The US government is also playing a significant role in developing the regional semiconductor business, which is also supporting the semiconductor silicon IP market.
• Semiconductor development has faced a gap in access to domestic sources of capital, especially in pre-seed, seed, and early-stage rounds and later stages across the country. This led to a significant percentage of foreign ownership across Canadian companies. At the same time, a lack of funding created an unfavorable environment for Canadian companies to exit too early.
• Moreover, Canadian graduates are among the best STEM talent globally by being sought after by global semiconductor companies for well-paying, high-skilled jobs. Canada will invest a total of CAD 240 million in its semiconductor industry, according to the Federal Minister, to boost the manufacturing and research of chips critical to national security and technological advancement.
• To develop and supply semiconductors, the minister of innovation, research, and industry established a CAD 150.0 million Semiconductor Challenge Callout fund. Another CAD 90.0 million has been given to the Canadian Photonics Fabrication Centre of the National Research Council of Canada.
• The US semiconductor industry has a significant place in the global market. The industry has witnessed significant growth even during the COVID-19 phase, supporting the market growth. According to the Semiconductor Industry Association (SIA), the US semiconductor industry directly employs nearly a quarter of a million workers in the country, and the US semiconductor companies' sales totaled USD 208 billion in 2020.

Competitive Landscape

The Semiconductor (Silicon) Intellectual Property Market is consolidated with large-scale vendors capable of both backward and forward integration, along with the presence of many players running the business in national and international territories.

The major players are primarily adopting strategies like product innovation and mergers and acquisitions to stay ahead of the competition. The major players in the market are ARM Ltd., Synopsys Inc., Cadence Design Systems Inc., Imagination Technologies Ltd., and CEVA Inc., among others.

• June 2021 - Faraday Technology Corporation announced its LPDDR4 and LPDDR4X combo PHY IP up to 4.2Gbps, which is currently available in Samsung’s 14nm LPC process. The highly compact design provides additional flexibility with two hardened configurations supporting both in-line rectangular and corner-edge placement.
• June 2021 - Arm Limited launched the Physical and POP IP Platform on Samsung Foundry 5nm Technology. Furthermore, Arm and Samsung Foundry engaged in developing Arm solutions compatible with Samsung's advanced production methods to fulfill the market's increasing demands.
• May 2021 - Cadence Design Systems, Inc. announced low-power IP for the PCI Express 5.0 specification that targets hyper-scale computing, networking, and storage applications that are made on TSMC N5 process technology. PCIe 5.0 technology consists of a PHY, companion controller, and Verification IP (VIP) targeted at SoC designs for very high bandwidth to suit the applications.

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• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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