The semiconductor IP market size to grow from USD 4.7 billion in 2017 to USD 6.5 billion by 2024, at a Compound Annual Growth Rate (CAGR) of 4.8% during the forecast period. The major factors that are expected to be driving the market are advancement in multicore technology for consumer electronics sector and increasing demand for modern SoC designs. The objective of the report is to define, describe, and forecast the semiconductor IP market size based on design IP (processor IP, interface IP, memory IP, and other IP), IP source (royalty and licensing), by business model, vertical, and geography.
The market for royalty sourcing is expected to continue to hold the largest share by 2024
The semiconductor IP market for royalty sourcing is expected to hold the largest share during the forecast period. In royalty IP sourcing, a chip manufacturer will have to pay for every single chip it manufactures. The market for royalty is flourishing due to fluctuations in the market for technology, as royalty can help manufacturers produce as much products as they wish and pay royalty for that products only. Moreover, majority of the giants source their semiconductor IPs through royalty model instead of licensing. This is one of the core reasons owing to which the market for royalty-based semiconductor IP is high.
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The market for automotive vertical is expected to witness highest growth from 2018 to 2024
The semiconductor IP market for automotive is expected to grow at the highest CAGR during the forecast period. The growth of semiconductor IP in the automotive sector is due to increasing application of microprocessor units (MPUs), microcontroller units (MCUs), sensors, analog integrated circuits (ICs), interfaces, and memory in autonomous and premium cars. The automotive industry is witnessing a digital transformation. The industry is moving toward digitization; dozens of embedded processors connected via multiple digital networks are controlling and optimizing operations of almost every system in automotive operations. The automobile industry is likely to witness the advanced versions of processors in future, with the advancements of enhanced signal processing algorithms project in safety, driver interfaces, emission control, and in-cabin entertainment and information. Approximately 100 processors are used in a high-end automobile, which makes it a flourishing application segment in the market.
Driver: Advancement in multicore technology for consumer electronics sector
Consumer electronics are becoming smarter and more intelligent due to increasing research and development activities. This is due to advanced components and chips made with the help of complex IPs designed for every application. The consumer electronics sector offers tremendous growth opportunities for the semiconductor industry and the semiconductor IP market players. The semiconductor industry is highly dependent on consumer electronics such as smartphones, tablets, and memory products. ICs and SoCs are extensively used in these consumer electronics applications, and an increase in demand for these products is reinforcing the semiconductor market and the market.
Presently, the consumer electronics sector holds a major share of the global semiconductor IP market. With the success of multicore technology in the embedded computing sector of large form factor, mostly in computing devices such as desktops, laptops, netbooks, and notebooks, the industry is expected to have a successful transformation in small form factor devices such as smartphones, tablet PCs, and other portable electronic gadgets such as wearable electronics.
The market for multicore processors is growing rapidly owing to the advancement of personal computing for consumer electronics globally and emerging technological advancements such as octa-core processors for smartphones. These multicore processors would present opportunities for the growth of the global semiconductor IP market in the future. Today, most portable consumer electronics run on multicore (dual-core or quad-core) processors. These processors are helping companies to be competitive in the market for consumer electronics by exhibiting fast, efficient, and error-free performance.
Restraint: Constant changes in technology
Technology is an ever-changing concept, especially in the semiconductor industry. In each leap, new technology would enter the market and break the equilibrium. Same applies to the IC industry where process nodes play a vital role. Change in nodes of a semiconductor chip changes design complexity, chip form factor, and IP core design architecture. Restraint in advanced SoC design is the effective implementation of these chips in advanced technologies, such as 20 nm planar and FinFET processes.
Migration to an advanced technology node increases design cost for IP vendors, while payments for licensing the IP suitable as per the new technology node may not match up to the rise in expenditure. The overall cost of SoC designs, including silicon IP and software IP, is increased by ~40%, with a shift in the node size from 32 nm to 28 nm and are expected to increase by 30% again with a shift of 22 nm. The overall cost of SoC silicon IP design is approximately increased by 36% with the node of 28 nm.
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