Key semiconductor IP players forecast to target China, South Korea, Taiwan and Singapore markets over the next few years

April 10, 2014 -- Global semiconductor IP market is forecast to total revenues of US$5.63 billion by 2020 as the industry reports strong increased demand over the next few years. During the period 2014 to 2020, the semiconductor IP market is forecast to increase by 12.6% CAGR.

Integrated circuits are becoming under increasing pressure to reduce their sizes further and this is placing added attention on the design teams to ensure that the circuits take up the least amount of space possible. New product time to market is being reduced at a time when consumers and manufacturers are demanding smaller end user products with more advanced functionality and improved reliability.

Semiconductor manufacturing processes have transformed significantly over recent years which has resulted in a strong increase in the number of electronic circuits incorporated on a single chip. The advent of system-on-chips has helped drive this increase in the number of electronic circuits on single chips. However, the design capabilities have not kept pace with the developments of chip technology which has acted as a dampener for chip developments.

One solution to the widening gap between design capabilities and the advancing manufacturing potential is for companies to license silicon-proven intellectual property (IP) such as processor cores, memory and application-specific logic blocks from third-party semiconductor (silicon) intellectual property companies rather than develop the technologies internally themselves.

The leading companies operating in the global semiconductor IP market are ARM (U.K.), Cadence Design Systems (U.S.), Imagination Technologies (U.K.), Synopsys (U.S.), Rambus (U.S.), Silicon Image (U.S.), and CEVA (U.S.) among others.

The recent trend towards using third-party SIP companies has driven strong growth in the global semiconductor IP market. This industry sector is relatively underdeveloped and is dwarfed by revenues reported for the parent semiconductor industry.

The System-on-Chip IP market represents one of the highest growth sectors compared to increases reported for integrated circuit IP markets over the same period.

The consumer demands for an integrated and advanced functionality for single devices places increased demands on the system-on-chips and advanced ICs although it is always necessary to balance an improved functionality and performance against the increased demands on power. New players are increasingly implementing a fab-lite or fabless strategy and this is resulting in the manufacturing process consolidating. Key players are increasingly outsourcing IP and IP cores in the semiconductor and electronic design industry have had a positive impact on the overall design of circuits on a semiconductor chip. The designs can be licensed several times which enables the IP core licensor to spread the cost of development among several chip manufacturers.

The strong growth in demand for smartphones and tablet PCs worldwide is forecast to drive revenue growth in the semiconductor IP market for mobile and tablet applications. Computer and peripherals represented the largest segment of the semiconductor IP market in 2013. Synopsys (US) and Arm (UK) are large companies targeting the mobile and table applications market to drive innovation in their products within these product groups.

Some of the emerging semiconductor IP market applications lie within the defence and aerospace sectors.

The United States represents the largest region for semiconductor IP revenues although the number of silicon IP vendors is increasing rapidly in the European sectors. South Korea, Taiwan and China have also reported a large number of IP vendors operating in these markets. In terms of Europe, it is the UK, France, Netherlands and Germany are primarily where the majority of IP vendors are operating in Europe, with UK, France, Germany and Italy representing the fastest expanding countries with regards to semiconductor IP revenues within Europe.

Ineda Systems, with expertise in the area of SoC/IP development, architecture and software necessary to design silicon and next generation systems of low power consumption, is raising US$17 million in series B funding. The company sees the market as being primed for a new class of semiconductor architecture, specifically designed to be ultra-low power and high performance for use in the rapidly expanding wearable technology industry. This investment was led by Walden-Riverwood Ventures and includes co-investors Samsung Catalyst Fund, Qualcomm Incorporated through its venture capital arm, Qualcomm Ventures, IndusAge Partners and others.

Over the next few years, the main focus for industry players is the markets of China, South Korea, Singapore and Taiwan.

For more information on the semiconductor IP market, see the latest research: Semiconductor IP Market