The gem of the semiconductor industry, the worldwide intellectual property (IP) market, is forecast to grow from $442 million in 1999 to $2.94 billion in 2004.
According to Dataquest, worldwide semiconductor IP revenue is projected to reach $620 million in 2000.
“IP is a key enabler of design re-use and is the only effective way of closing the ‘design gap’. Without this technology, semiconductor vendors and OEMs will not be able to take advantage of today’s manufacturing advances,” said Jim Tully, chief analyst for Gartner Dataquest’s worldwide semiconductor group.
“Although the IP market is very new, it is now hard to image the semiconductor industry without ARM, MIPS, Rambus and some of the other prominent IP players,” he added.
A semiconductor IP block is a predesigned function to be implemented in a semiconductor device. In some cases, the functions are parameterisable, allowing a degree of customization. These functions include physical library functions (analog or digital), basic blocks (such as counters and muxes) and system-level macros (also known as cores or virtual components) – including memory blocks. The microprocessor and bus interface blocks will become the dominant features of this market by 2004.
“IP usage is driven by user demand and by the availability of suitable products from credible vendors. Today, most IP vendors are very small and are perceived by large potential customers as vulnerable,” said Tully.
“Customers are reluctant to purchase strategically important IP from these companies until they are a little bigger and more stable. We believe the industry will pass through this stage within two years to emerge ready for stronger growth beyond 2004.”
At this stage in the development of the IP market, many vendors are entering and leaving the business. Gartner Dataquest analysts said many of the new entrants are design houses that are looking to capitalize on internal IP and to steer the business into a more scalable model.
“However, we believe that many of these companies will exit the market as they find the IP business to be very different to design services and beyond their current capabilities. ASIC vendors, ASSP vendors or OEMs will acquire other IP companies,” added Tully.
More information on this market is available in the Gartner Dataquest report, ‘Worldwide Semiconductor Intellectual Property Forecast, 2000 through 2004’. The document provides a forecast of this market by product type, region and revenue category.
The future of the semiconductor industry will be discussed during Gartner Dataquest’s Semiconductors 2000 conference, 30-31 October at the Hyatt Regency La Jolla at Aventine, in San Diego, California. In its 26th year, this conference provides information for senior executives, managers, planners and developers from chipmakers, chip users, semiconductor equipment and materials providers and investors.