WSTS: Global chip design IP sales to grow 19.4% year-on-year to $5.45 billion in 2021

According to statistics from the World Semiconductor Trade Association (WSTS), following a 16% year-on-year increase in chip design IP sales in 2020,Design IP sales increase 19.4% year over year to $5.45 billion in 2021. Meanwhile, semiconductor sales in 2021 increased by 26.2% year over year. Based on this, IPnest released the Design IP Report in May 2022, ranking IP vendors by category.

Key trends for design IP in 2021 are very positive for most IP vendors, notably Synopsys with a 21.7% increase, Imagination Technologies (IMG) with a 43.4% increase, flash compiler vendors (Super Jet Semiconductor, Liwang Electronics) ) and Alphawave grew by more than 100%.

Clearly, the growth of Synopsys and Alphawave confirms thatWired Interface IP Marketimportance (22.7% growth for this category), in line with data-centric wired interface applications, superscalar, data center, networking, or IA. However, the good performance of ARM and IMG is a testament to the recovery of the smartphone industry, and the rise of the automotive industry as a growth vehicle.

A review of the evolution of the IP market from 2016 to 2021 provides information on key trends in the IP market.Global IP market grew by 59.3%, while the growth of the top three suppliers has been uneven. No. 1 ARM increased by 33.7%, No. 2 Synopsys increased by 140.9%, and No. 3 Cadence increased by 167.2%.

Relatively speaking, market share information is more important. ARM’s market share fell from 48.1% in 2016 to 40.4% in 2021, and Synopsys’ market share increased from 13.1% in 2016 to 19.7% in 2021 (or 50% market share from 2016 to 2021) , while Cadence’s market share will grow from 3.4% in 2016 to 5.8% in 2021.

In addition, a comprehensive analysis can be made by comparing the compound annual growth rate from 2016 to 2021. Among them, a strong message is that the CAGR of the design IP market from 2016 to 2021 is close to 10%. It’s also worth noting that Synopsys’ CAGR of 19.2% is more than triple that of ARM (6% CAGR).

IPnest also calculated the ranking of IP vendors based on licensing and royalty IP revenue:

Synopsys Ranks No. 1 with 31.2% Market Share in 2021 by IP Licensing Revenue, while ARM ranked second with a market share of 25.6%. Founded in 2017, Alphawave now ranks fourth behind Cadence, demonstrating the importance of high-performance SerDes IP for modern, data-centric applications.

In fact, Synopsys’ good performance is partly related to their strong focus on wired interfaces, they have a 55.6% share of the 1.3 billion market, and high-performance SerDes is the mainstay of the interconnect market. Synopsys adopts a “one-stop” strategy, supports almost all protocols (USB, PCIe, Ethernet, SATA, HDMI, MIPI, DDR memory controller) and has leading market share in each protocol.

Alphawave is complementary in the sense that their strategy is more “Stop-For-Top”, limiting their support for the most advanced products on leading edge technology nodes. But if you look at the design IP results in 2021, both can be successful and follow different strategies and market positions.

2021 royalty ranking shows ARM dominates with 60.8% market share, which is not surprising if you consider their installed base of customers and their strong position in the smartphone industry. What’s more surprising is the resurgence of Super Jet Semiconductor and Imagination Technologies (IMG), placing them second and third in the top five, respectively.

Super Jet is benefiting from a pick-up in the microcontroller market as they feature most of the microcontroller products sold. And IMG has been able to overcome the cold snap brought on by Apple a few years ago and reposition itself as a modern GPU supplier in various segments beyond smartphones, such as automotive entertainment, smart TVs or tablets.

The design IP industry grew by 19.4% year-over-year in 2021, proving that this segment is very strong in the semiconductor market, while the past compound annual growth rate of 9.8% between 2016 and 2021 is a good measure. IPnest also has a 5-year forecast for design IP (not yet published) that the design IP market will reach $11 billion in 2026, with a CAGR (2021-2026) of 15%.