Get a SampleJune 2023
The global semiconductor IP market size surpassed USD 6.94 billion in 2023 and is estimated to increase from USD 7.53 billion in 2024 to approximately USD 17.06 billion by 2034. It is projected to grow at a CAGR of 8.52% from 2024 to 2034.
The global semiconductor IP market size is projected to be worth around USD 17.06 billion by 2034 from USD 6.94 billion in 2024, at a CAGR of 8.52% from 2024 to 2034. The semiconductor IP market growth is attributed to the adoption of automation and robotics, which drives the need for advanced IP (intellectual property) solutions.
Semiconductor intellectual property is made up of reusable blocks of functionality that are required in designing ICs, as well as SoC devices, which have already been designed and tested. These components include processors and memory modules, differential and other analog signal circuits, and many other interface modules that are designed and offered for licensing to semiconductor manufacturers and system designers by other companies.
It remains paramount for the concerned system solution units and semiconductor companies to enhance the efficacy of the overall systems they use through the semiconductor IP market services to support the speeding up of chip designs and product development.
Embedding well-developed and well-tested IP cores into their devices, both the manufacturers and the designers are able to concentrate more on those areas that are unique to the applications that the device is intended for instead of worrying about the basics. Furthermore, the growth of applications that require higher computational capacity and the emergence of big data challenges increase the demand for the semiconductor IP market.
Impact of Artificial Intelligence on the Semiconductor IP Market
The rapid integration of artificial intelligence (AI) and machine learning into various applications fuels the demand for specialized semiconductor IPs. AI technologies require high-performance processing power and efficient data handling, which drives the need for custom IP cores designed to optimize these functions. AI has a role in automation, prediction, and individualized marketing, which provides a competitive advantage for the business. The expansion of AI across sectors like healthcare, automotive, and finance is anticipated to further boost the semiconductor IP market.
Organizations swiftly adopt AI to improve performance, introduce new products, and improve customer relations, a factor that significantly increases the need for better computing power. AI grows the GPU or the custom processor market, which in turn pushes the growth of the semiconductor IP market. Thus, AI is not only about technological solutions but also about the transformation of market relations, to which industries are inclined to shift into the future with AI as one of the core strategies.
| Report Coverage | Details |
| Market Size by 2034 | USD 17.06 Billion |
| Market Size in 2023 | USD 6.94 Billion |
| Market Size in 2024 | USD 7.53 Billion |
| Market Growth Rate from 2024 to 2034 | CAGR of 8.52% |
| Largest Market | Asia Pacific |
| Base Year | 2023 |
| Forecast Period | 2024 to 2034 |
| Segments Covered | Design IP, Source, IP Core, End-user, Interface Type, Vertical, and Regions |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
Autonomous vehicles
Rising interest in autonomous vehicles is likely to propel the semiconductor IP market. This trend shift is due to reliable semiconductor IPs that accommodate the features of ADAS, real-time data processing, and vehicle-to-everything connectivity. It is for these technologies that the IP cores required for safety, reliability, and minimal latency have popped up as exigent demands for next-generation semiconductor solutions. With the development of complex in-V2X networks and the use of AI & machine learning in decision-making, this specialization of IP is even more prominent.
The semiconductor IP market for use in automakers’ and tech companies’ testing of autonomous vehicles is in development and constantly moving toward the expansion phase. Electric vehicles (EVs) have come into the market, and since EVs use complex semiconductors IP to manage electric power and optimize battery usage. Additionally, the growing number of autonomous electric vehicles further boosts the market.
High licensing costs
The high costs associated with IP licensing are expected to hamper the semiconductor IP market. The general high costs of IP licensing are likely to pose issues for small and emerging companies. There is a vast selection of advanced IP cores available for use; problems arise when the set price is so high that most users, particularly those in the business world, cannot afford to pay the price by the time they are through with the design. This leads to an increase in the fixed costs within the industry, resulting in the concentration of market power with the large firms that bear such costs, hence minimizing innovation and competition. Moreover, high licensing fees also pose threats to new entrants in markets that make the market less diverse when it comes to IP solution providers, thus making the market less dynamic.
Rapid technological advancements
A growing number of features of products and services implemented with the help of artificial intelligence and machine learning appear in the market, which creates a need for specialized IP cores. AI needs advanced computation, which drives the need for customized semiconductor IPs to achieve efficiency in computation and the lowest power consumption. This has been greatly observed in industries such as health, car manufacturing, and the financial industry, where many practices are being shifted to AI.
Advanced work in AI-specific IP solutions is expected to create new opportunities for IP vendors to help the latter expand their revenues and encourage innovations. Additionally, the introduction of edge computing, which involves AI processing at the source of data, creates demand for exceptional IP solutions. All these factors will contribute to boosting the semiconductor IP market in the coming years.
The interface IP dominated the global semiconductor IP market in 2023. Interface IPs, which incorporate USB, HDMI, and PCIe, are growing as they are an important tool for the exchange of data between any two components within a single chip or between two different chips. The growing requirements of higher bandwidth, better interfacing, and integration solutions are boosting the segment. Industries moved more to interconnected and interdependent systems, and interface IP became a prerequisite for smooth interconnectivity, thus capturing a large market share that year.
The memory IP segment is projected to grow rapidly in the semiconductor IP market in the future years, owing to the increased demand for memory-density-driven applications, including AI machine learning and big data analysis. Memory IP, including technologies such as DRAM, SRAM, and NAND Flash, is foreseen to gain further demand because the demand for higher storage density and faster access speed continues to rise.
This is further compounded by the growth of data centers, cloud computing, and edge computing, which require high-quality and superior-performing memory IP. Furthermore, the continuing tendency is to use more memory in chips to solve top-level tasks and minimize delays, which further fuels the market during the forecasting period.
The royalty segment held the largest share of the semiconductor IP market in 2023 due to the growing deployment of semiconductor IP, which industries depend on royalty-based engagements on the IP cores they require and only obtain from selected third-party vendors. Royalty-based models are being preferred by companies because their cost structures dovetail perfectly with the success of products and, therefore, hold significant financial attractiveness, especially to large manufacturers.
This flexibility and scalability also appeal to organizations interested in keeping initial costs low and, at the same time, adopting innovative technology solutions; in this context, royalties also have an appeal to independent inventors and mushrooming start-ups. Moreover, the growing semiconductor industry and its specialization in high-growth applications in AI and internet of things (IoT) are expected to strengthen the position of the royalty segment.
The licensing segment is projected to significantly expand in the semiconductor IP market in the coming years, owing to the increasing number of clients looking for IP solutions that help them set their products apart from other competitors within the market. Licensing is beneficial for companies as it allows them to purchase and incorporate certain IP cores directly into their handled designs, which results in higher control over the products and innovations. Furthermore, the increasing importance of IP security and protection influences the preference for licensing, as they provide a greater possibility for companies to control their IPs.
The hard IP core segment dominated the global semiconductor IP market in 2023 due to its highly deterministic design. They can indeed claim to be highly optimized for specific applications, and thus, they have a shorter time to market than other ICCs, and their development costs are lesser. The use of hard IP cores has become especially beneficial in applications such as data centers and networking applications, where performance is vital. These factors have made them popular since they are able to perform sophisticated operations for several hours or even days with low power consumption and much-improved processing strengths. Additionally, dependence on consistent performance in customer electronics and automotive systems creates demand for hard IP cores.
The soft IP core segment is projected to expand rapidly in the semiconductor IP market in the coming years, owing to the flexibility and portability of soft IP cores, which are becoming popular with flexible applications in different fields. These cores, which come as source code, are flexible and can be customized and easily embedded into numerous semiconductor architectures. This flexibility is anticipated to create a massive market since organizations are trying to design their products or services to zone in particular needs and technologies. Soft IP cores are significantly involved in bringing innovation in new areas, such as IoT, consumer electronics, and automotive systems. Furthermore, the increased usage of heterogenic computing platforms that combine different types of processors further boosts the soft IP demand.
The DDR segment dominated the global semiconductor IP market in 2023 due to its usage in high-performance computing and consumer applications. DDR memory interfaces, especially DDR4 and DDR5, brought important upgrades in data transfer rates and width that were essential to satisfy the requirements of contemporary processors and graphic card complexes. Newer applications that require data usage, including gaming, AI, and data analysis, were in need of faster memory solutions, which DDR interfaces provided.
Additionally, the DDR technologies are constantly evolving from DDR3 to DDR4, and the more recent DDR5, which provided better performances, lower power consumption capabilities, and larger memory capacities, helped to maintain the firm’s dominance in the semiconductor IP market.
The PCI segment is projected to grow at the fastest rate in the semiconductor IP market in the future years, as it is basically destined to deliver high-speed data transfer and connectivity in several applications. The development of PCIe interfaces is stimulated by the growing demand for higher data transfer speeds for computers and their components. It was the advent of PCIe 5. 0 and PCIe 6. 0 standards, which have much higher bandwidth and even lower delay relative to previous standards, that continued this trend.
Generic PCIe is an amalgamation that has the capacity to support non-homogeneous kinds of devices, including SSDs, GPUs, and networking cards, therefore making it central for contemporary computer and storage solutions. Additionally, the increasing usage of data-demanding applications and the usage of higher computing power technologies increase the demand for evolving PCIe interfaces.
The telecommunications & data centers segment held the largest share of the semiconductor IP market in 2023 due to the growth of 4G along with the early-stage 5G network, creating the need for semiconductor IP in the application of sophisticated network equipment and intensive data processing. Telecommunications firms and data centers demanded stricter kinds of IP solutions to counteract the augmentation of data pressures and strengthen the networks.
The advancement in cloud computing, usage of big data analytics, and streaming services have made the need for high-performance IP cores necessary for carrying higher-speed data. Furthermore, edge computing, in which data processing takes place near the data source, played a role in the use of semiconductor IP in telecommunication and data center markets.
The automotive segment is projected to expand significantly in the semiconductor IP market in the coming years, owing to the rising demand for enhanced driver assistance systems, and related to that, self-driving systems are the primary reason for this increase. Tier-1 auto suppliers, OEMs, and tech companies are actively working to incorporate and design semiconductor IP solutions that enable real-time data processing, V2X connectivity, and safety-related control systems.
Moreover, the increasing trend for smart and connected automobiles makes automobile manufacturing a prospective market for suppliers of semiconductor IP to provide new solutions for vehicles’ performance and user satisfaction.
The integrated device manufacturer (IDM) led the global semiconductor IP market in 2023 due to the rise in demand for semiconductors that come designed with high-performance attributes used in various industries, such as consumer electronics industries, the automotive sector, and telecommunications. IDMs are advantaged due to their production control since IP integration and improvement of product performance are better controlled by them.
Furthermore, their superior and large R&D spending lets IDMs introduce IP solutions that are unique to the market needs, which makes them command the market. The capitation of designing and manufacturing functions in IDM helps them to meet the continuously increasing market demands for sophisticated semiconductor technologies, therefore enhancing their competitive advantage.
The foundry segment is projected to witness growth at the highest CAGR in the semiconductor IP market in the coming years. The sophistication in the design of semiconductor products and the reasons for the progression of manufacturing technology, including 5nm or 3nm minimum procedures in manufacturing, promote the necessity of owning foundries. Semiconductor design is increasingly complex, and more companies are looking for trusted foundries that support the advanced node and offer high-quality IP.
The outsourcing of manufacturing to foundries is becoming more common because the design companies concentrate on design development and leave the high-tech production to the foundries. Additionally, increasing application areas in both artificial intelligence and fifth-generation mobile communications technology creates demand for specialized semiconductor production, thus boosting the market.
Asia Pacific dominated the semiconductor IP market, and the region is observed to sustain its position in the coming years, owing to the large and ever-growing market for electronics in this region. Consumer electronics, automotive technologies, and telecommunication technologies that are rapidly growing in Asia Pacific foster this growth. Furthermore, the electronics manufacturing industry in the region is large and expanding; this thus provides the necessary grounds for the development of new IP technologies.
On the other hand, the semiconductor IP market is being supported by multiple investments, schemes and initiatives offered by governments. For instance, in its Union Budget 2024, the Indian government has raised investment in semiconductor industry to a significant level. This initiative is observed to promote the market’s expansion in the upcoming years.
Indian Government Initiatives in Semiconductor Industry
| Scheme | Modification |
| Setting Up for Semiconductor Fabs |
Fiscal support of 50% of Project Cost on a pari-passu basis for all technology nodes. |
| Setting Up for Display Fabs | Fiscal support of 50% of Project Cost on a pari-passu basis for all technology nodes. |
| Setting Up of Compound Semiconductor/Silicon Photonics/Sensors Fab and Semiconductor ATMP/OSAT Facilities | Fiscal support of 50% of capital expenditure on a pari-passu basis. Target technologies include Discrete Semiconductor Fabs |
On the other hand, North America is observed to be the fastest growing in the semiconductor IP market throughout the forecast period. The region’s position is, however, mainly a result of technological development and high investment in research. North American tech firms and semiconductor companies constitute the largest market segment and are the main consumers of new and advanced IP assets. Data centers, telecommunications networks, and consumer electronics manufacturers are the reasons that the market has had relatively significant growth in this region. Furthermore, the advancement of new technologies, such as 5G and AI, if embraced quickly alongside sound funding in the venture capital market, continues to foster the progress of semiconductor IP in North America.
Segments Covered in the Report
By Design IP
By IP Source
By IP Core
By End-user
By Interface Type
By Vertical
By Geography
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