June 23, 2008 – The global market for semiconductor IP rose 8% in 2007 driven by chip integration and cost, settling into a more muted pattern after three years of double-digit growth, with continued consolidation/M&A in the sector as vendors wrestle over marketshares, according to data from Gartner.
The firm estimates that, based on its annual survey, the overall semiconductor IP market (including technology licensing and IP) rose to $1.9B last year, with ARM the dominant player (24% share), more than twice as much as second-place Rambus.
The design sector by itself grew about 9% to $1.4B; in this area MIPS leapfrogged into 2nd place with its acquisition of Chipidea, followed by Synopsys. Technology licensing sales rose 8% to $550M. Processor and physical IP segments rose 10% and 9% respectively.
Best sales growth in the chip IP sector in 2007 went to analog/mixed-signal IP, which surged 34%; also doing well was fixed-function signal processing (17%).
Just as the overall chip industry is getting used to milder single-digit annual growth trends, IP vendors too should expect smoother, milder growth patterns, writes Gartner analyst Ganesh Ramamoorthy, in a research note. Increasing focus on cost and chip integration is good news for semiconductor IP in general, but those IP firms seeking to position themselves the best in this growth environment should approach the issues of IP integration and software development from an overall system design point-of-view, he writes.
“Moreover, as growth rates decline, we believe that small to midsize IP vendors should prepare to acquire other companies — or be acquired — as consolidation has become IP vendors’ key strategy for gaining scale and remaining in the market,” he writes.