News Article
Semiconductor IP Market on the Rise
Intellectual property (IP) is becoming increasingly essential in the design and development of semiconductors, a phenomenon that will cause the IP market to grow to more than $2 billion in size by 2009, market analyst iSuppli predicts.
Intellectual property (IP) is becoming increasingly essential in the design and development of semiconductors, a phenomenon that will cause the IP market to grow to more than $2 billion in size by 2009, market analyst iSuppli predicts.
The worldwide semiconductor IP market, consisting of licensing and royalty revenue, will expand to $2.04 billion by 2009, rising at a Compound Annual Growth Rate (CAGR) of 10.6% from $1.2 billion in 2004, according to iSuppli.
This will exceed growth in the overall semiconductor market, and in the core-silicon segment, which consists of ASICs, Programmable Logic Devices (PLDs) and Application-Specific Standard Products (ASSPs).
While IPs vital importance to semiconductor design is not a new development, each new semiconductor process node increases the need to use IP as part of the standard design methodology.
The expanding integration capability of core silicon, including PLDs, mandates increasing usage of IP, because engineers simply cannot design a chip from scratch fast enough to meet time-to-market requirements. Furthermore, the increasing trend toward standards-based systems, where most of the systems functionality is driven by the need to meet industry standards and there is little need to differentiate a system in hardware. Consequently, there is no benefit, but some risk, for an engineer to design such functions from scratch, and it makes sense to simply acquire proven IP from a reliable source.
As core silicon integrates more system functions, IP blocks integrated within ASSPs, ASICs or PLDs will replace standalone components, iSuppli believes.
Royalties, which represent the Holy Grail for IP vendors, are becoming the largest source of revenue in the IP market. This offers benefits to both vendors and customers, with the former enjoying a share of the chip revenue stream, and the latter the opportunity to offload some portion of the risks to their IP supplier. Long term, this trend means that growth in the IP market will be more closely tied to growth in semiconductor sales, particularly core silicon revenues, rather than to new design starts.
The worldwide semiconductor IP market, consisting of licensing and royalty revenue, will expand to $2.04 billion by 2009, rising at a Compound Annual Growth Rate (CAGR) of 10.6% from $1.2 billion in 2004, according to iSuppli.
This will exceed growth in the overall semiconductor market, and in the core-silicon segment, which consists of ASICs, Programmable Logic Devices (PLDs) and Application-Specific Standard Products (ASSPs).
While IPs vital importance to semiconductor design is not a new development, each new semiconductor process node increases the need to use IP as part of the standard design methodology.
The expanding integration capability of core silicon, including PLDs, mandates increasing usage of IP, because engineers simply cannot design a chip from scratch fast enough to meet time-to-market requirements. Furthermore, the increasing trend toward standards-based systems, where most of the systems functionality is driven by the need to meet industry standards and there is little need to differentiate a system in hardware. Consequently, there is no benefit, but some risk, for an engineer to design such functions from scratch, and it makes sense to simply acquire proven IP from a reliable source.
As core silicon integrates more system functions, IP blocks integrated within ASSPs, ASICs or PLDs will replace standalone components, iSuppli believes.
Royalties, which represent the Holy Grail for IP vendors, are becoming the largest source of revenue in the IP market. This offers benefits to both vendors and customers, with the former enjoying a share of the chip revenue stream, and the latter the opportunity to offload some portion of the risks to their IP supplier. Long term, this trend means that growth in the IP market will be more closely tied to growth in semiconductor sales, particularly core silicon revenues, rather than to new design starts.
