Both big companies with and without IP business are in a hurry.

Chip IP is becoming increasingly important.

At the recently concluded RAISE AI Conference in Paris, a statement sparked discussions: EDA is gradually evolving into an IP business, with less and less need for the verification of modules or the assembly process of chips.

Of course, the reality isn't as exaggerated as that. Walden Rhines, the executive initiator of the SEMI Electronic Design Market Data Report, believes that this view has been proposed before but hasn't been validated by reality. However, he also stated: "There's no doubt that IP is extremely powerful."

Recent industry trends also illustrate this point. Whether it's the data released by research firms, the frequent mergers and acquisitions in the IP field, or the breakthroughs in new technologies, they all prove the attractiveness of the IP business.

Those big players who have caught a whiff of the opportunity can't wait to join the game.

01 How Attractive is the IP Business?

Semiconductor IP, or semiconductor intellectual property, encompasses pre - designed and pre - verified components that are crucial for the development of semiconductor chips and integrated circuits. This includes key elements that semiconductor companies can license or reuse, such as memory controllers, processor cores, and interface protocols.

Recently, according to data released by industry institution IPnest, the global semiconductor design IP market reached a scale of $8.4916 billion in 2024, a 20.2% increase from $7.0625 billion in 2023, setting a new historical high. Among them, wired interface IP and processor IP showed strong performance, with growth rates of 23.5% and 22.4% respectively.

In 2024, the total revenue of the top 10 global design IP market manufacturers reached $7.089 billion, a year - on - year increase of 22.8%. Their market share rose from 81.7% in 2023 to 83.7%. Among them, ARM and Synopsys together accounted for 66% of the market share, a 4.5 - percentage - point increase from 2023. The top four suppliers (ARM, Synopsys, Cadence, and Alphawave) collectively held 75% of the market share, up from 72% in 2023.

Among them, wired interface IP is the main driving force for the growth of the design IP market. IPnest predicts that the market will continue to grow from 2024 to 2029, at a rate comparable to the 20% growth rate in the 2020s. The institution stated that artificial intelligence is driving the development of the semiconductor industry, and the efficiency of interconnection protocols is enhancing the performance of artificial intelligence, creating a positive cycle. In contrast, in 2023, the semiconductor market declined, but the interface IP market grew by 17%.

The current main technological direction in the interface IP field is Chiplet. Chiplet technology can balance the computing performance and cost of chips, improve design flexibility, and enhance the economy and reusability of IP modules. The implementation principle of Chiplet is similar to building blocks. It integrates pre - fabricated chip dies with specific functions through advanced integration technologies (such as 3D integration) to form a system - on - chip.

While inheriting the IP reusability feature of SoC, Chiplet further initiates a new model of semiconductor IP reuse, namely IP reuse at the silicon wafer level. IPs with different functions, such as CPUs, memories, and analog interfaces, can be produced using different processes flexibly. This allows for a flexible balance between computing performance and cost, achieving the optimal configuration of functional modules without being restricted by the foundry process.

The development and evolution of Chiplet have expanded the business flexibility and development space for IP suppliers, especially those with chip design capabilities.

In the processor IP field, the RISC - V architecture is injecting new vitality. RISC - V is an open - source instruction set architecture based on the principle of "reduced instruction set computing". Its core feature is complete openness and free use. Any enterprise or individual can freely use, modify, and expand its architecture without paying high licensing fees, thus breaking the barriers of traditional proprietary architectures.

RISC - V adopts a modular design, with a small and streamlined basic instruction set. It allows designers to flexibly add standard or customized extended instruction sets according to the requirements of specific application scenarios (such as the Internet of Things, artificial intelligence, and embedded control). This high degree of flexibility and customizability enables the creation of processors optimized for specific tasks, achieving the best performance, power consumption, and area (PPA) performance.

Due to its open and low - threshold nature, RISC - V is triggering a global wave of chip design innovation and rapidly building a large ecosystem covering toolchains, software, and hardware IP. It is widely regarded as the third major mainstream architecture that will profoundly impact the semiconductor industry landscape after x86 and ARM.

IPnest stated that the strong growth of the design IP market in 2024 reflects the continuous global demand for high - performance computing and advanced interface IP. With the further popularization of AI, big data, and 5G technologies, the design IP market is expected to continue its rapid growth in the next few years.

02 Big Players without IP Business, Hurry Up and Join

Realizing the prospects of the IP market and the importance of the technology, many big players that previously had little involvement in the IP business are rushing to get on board.

For example, on July 8 local time in the United States, GlobalFoundries, a major wafer foundry, announced a definitive acquisition agreement with MIPS, a leading supplier of artificial intelligence and processor IP. This transaction will enable GlobalFoundries to offer its own processors and other products based on the RISC - V instruction set architecture, making the company a competitor to some of its foundry customers.

Analysts said that this acquisition strengthens GlobalFoundries' IP portfolio, allowing it to integrate MIPS' technologies, including general - purpose CPU IP, AI inference acceleration IP, and various sensors. MIPS has recently expanded its RISC - V ISA - based processor product line, with its Atlas product line covering a variety of cores for general - purpose and real - time processing, as well as dedicated cores designed for AI edge workloads. These cores are designed to provide high performance for compute - intensive workloads in embedded systems with relatively low power consumption.

Of course, this doesn't mean that GlobalFoundries intends to develop processors on its own or transform into an integrated device manufacturer (IDM). In an interview, Erica McGill, the director of corporate communications at GlobalFoundries, said that the company hopes to provide customers with "ready - to - use" computing IP to speed up their product launch process.

After this acquisition, GlobalFoundries will become the first foundry to offer processor IP based on the open - source RISC - V instruction set architecture for computing application scenarios, which will greatly enhance its attractiveness to new customers.

Siemens has also realized the importance of IP. It is reported that Siemens has officially launched a plan to establish an IP alliance as part of its breakthrough strategy in the advanced wafer foundry field.

As a leading EDA software provider, Siemens EDA has deepened its cooperation with professional IP companies such as Alphawave to ensure the supply of basic interface IP. Recently, it has also contacted several emerging IP startups to expand its product portfolio and is targeting major industry giants including Samsung and TSMC.

Sources revealed that Siemens EDA has sent cooperation invitations to several IP startups in South Korea and the United States. The goal is to attract competitive companies focusing on neural network processors (NPUs), artificial intelligence accelerators, high - speed interfaces, and other key areas to build an integrated IP - EDA platform.

Industry insiders pointed out that Siemens realizes that it's difficult to surpass Synopsys and Cadence with only its existing EDA tools. Therefore, Siemens aims to carve out a new path by combining an integrated IP supply strategy. Although this approach is similar to that of Synopsys and Cadence, Siemens, as a latecomer, seeks to expand its influence by collaborating with niche IP suppliers.

03 Big Players with IP Business, Step on the Gas

Under such competitive pressure, those big players that laid out the IP business early on don't dare to relax for a moment.

On April 17, Cadence announced a definitive agreement to acquire Arm's Artisan Foundation IP business. This business includes standard cell libraries, memory compilers, and general - purpose I/O (GPIO) optimized for the advanced process nodes of leading foundries. This transaction will strengthen Cadence's expanding design IP product line, whose core products include leading protocol and interface IP, memory interface IP, SerDes IP for the most advanced nodes, and embedded security IP provided by the soon - to - be - acquired Secure - IC company.

Boyd Phelps, senior vice - president and general manager of Cadence's Silicon Systems Group, said: "With the addition of Arm's Artisan IP, Cadence will enter the foundation IP market and support new growth in design services and chiplet products."

Cadence CEO Anirudh Devgan said: "New opportunities are emerging constantly, especially with the development of 3D - IC and AI. Therefore, we're doubling down on our investment in IP." He said: "The number of IPs and process nodes we offer has increased significantly. IP is now one of Cadence's largest R & D teams, and we'll continue to invest, not only in physical IP and interface IP but also in Tensilica, which is widely used as an embedded processor."

On June 9 local time, Qualcomm announced an agreement to acquire Alphawave, a major semiconductor IP company, for approximately $2.4 billion.

Alphawave, founded in 2017, focuses on high - speed interconnection IP licensing and custom chip design. Centered around serializer/deserializer (SerDes) technology, it covers protocols such as PCIe, CXL, and UCIe, supporting transmission rates from 112Gbps to 224Gbps, and incorporates low - power PAM4 modulation and adaptive error - correction algorithms.

The core goal of this merger is to strengthen Qualcomm's layout in the data center market. The company plans to leverage Alphawave's leading capabilities in high - speed wired connections and computing technologies to accelerate its expansion in high - growth application areas such as AI inference. Qualcomm CEO Cristiano Amon said that Alphawave's technology is a perfect complement to Qualcomm's self - developed low - power Oryon CPU and Hexagon NPU, and their cooperation will drive the development of "next - generation connected computing performance".

Synopsys is ramping up its layout in the RISC - V ecosystem through its accumulation in toolchains, verification platforms, and custom IP.

Yankin Tanurhan, vice - president of Synopsys, said at the 5th RISC - V China Summit that in response to the rapid growth of RISC - V and the design complexity challenges of AI SoCs, Synopsys is shifting its IP business from providing individual components to offering integrated solutions.

Specific measures include launching a RISC - V processor IP family (such as ARC - V and RPX) covering from embedded to high - performance computing, and deeply integrating it with the company's EDA design tools and Zebu hardware verification platform. The goal of this strategy is to provide customers with a more complete platform that includes IP, tools, and verification, simplifying the development process of complex chips and lowering the technical threshold for customers to adopt the RISC - V architecture, thereby expanding business in this emerging ecosystem.

04 Conclusion

Overall, the strategic position of semiconductor IP is undergoing fundamental changes. The annual market growth rate of up to 20% reflects its increasing economic value, while technologies such as Chiplet and RISC - V are reshaping its application models and innovation paths.

Facing this trend, the major players in the industry have clear strategic intentions. Some big players like Cadence and Synopsys are leveraging their existing IP moats to expand their business scale and variety, while companies such as Qualcomm and GlobalFoundries aim to strengthen their product competitiveness through IP acquisitions.

These business activities jointly indicate that owning and controlling core IP has become the key to competition in the current semiconductor industry and directly influences the future industry landscape.

This article is from the WeChat official account "Semiconductor Industry Insights" (ID: ICViews), author: Junxi. It is published by 36Kr with authorization.