Design IP revenue grew 5.2% last year, according to IPnest.

Arm remains the No.1 vendor with a 40% market share.

Although Arm  license revenues have grown by 13.8% its  royalty revenues have declined by 6%.

Arm attribute this loss in royalty to the smartphone volume decline.

It will be another two years before the impact, if any, of RISC-V  on Arm revenues, says IPnest.

Synopsys and Cadence, respectively #2 and #3, are growing respectively by 13.8% and 22.9%.

Synopsys’ highest growth come from the Interface IP category (19.3%), the other categories also contributing, but less, when Cadence growth is shared between Interface IP (thanks to Nusemi acquisition, but not only) and DSP IP (Tensilica).

Both EDA vendors are positioned as “one-stop-shop” IP suppliers, both have created their IP offer by running the acquisition of small to mid size vendors leaders on their segment. Synopsys has started in the early 2000’s when Cadence positioning in IP has started with Denali acquisition in 2010.

This growth rate shows that their IP long term strategy is successful. Being a “one-stop-shop” supplier strategy has been made possible because both were large enough companies with deep pocket allowing the multiple acquisitions to make to support this positioning.

We will see that the other winners in the IP market are, at the opposite, companies being extremely focused and able to be technical leaders on their segment or sub-segment.

The different IP categories have evolved  between 2018 and 2019.

In processor IPnest aggregates CPU, DSP and GPU IP categories.

Interface is one category, integrating the protocol-based function like USB, PCI Express, Ethernet, MIPI, SATA, DP, but also Die-to-Die (D2D) interface and memory controller (DDRn, LPDDRn, HBM, GDDR).

The market share of processor has moved from 53.5% to 51%, when interface category has enjoyed, passing from 20.3% to 22.1%.

In 2016, processor was weighting 63.8% when Interface was only 16.9%.

The remaining two groups are “Other Physical”, aggregating various categories, “SRAM memory compiler”, “other memory compiler”, “physical library”, “Analog & Mixed-Signal” and “Wireless Interface” and the last group is “Other Digital”.

Both groups are relatively stable, which means that they have grown at the same rate that the rest of the IP market, a bit more with “other physical” moving from 18% to 18.8%.

The interface IP market is the big winner in term of growth and market share, weighting $870 million in 2019.

In 2009 Interface IP category was weighting $220 million, it has been multiplied by 4X in 10 years.

The evolution of interface IP illustrates the move from wireless phone to data centric.

In 2010, a large part of interface IP business was generated by smartphone SoC integrating protocols like USB, memory controller, HDMI, DP, SATA and MIPI, but no PCIe or Ethernet.

In 2019, data-centric applications represent the largest share of interface IP business.

Data-centric like data center, server, wired networking and 4G/5G base stations.

In all these applications you can find advanced memory controller (DDR4, HBM2, GDDR6), PCIe and Ethernet requiring high-speed SerDes (up to 56G if not 112G) and emerging die-to-die (D2D) solutions.

Smartphones will obviously continue to integrate USB, HDMI or LPDDRx memory controller, but IPnest expects the growth of IP market to be generated by data centric application during the 2020 decade.

An example to illustrate this trend is GPU IP usage in smartphone. The two market leaders, Samsung and Apple, have changed from GPU IP supplier (ARM or IMG) to a non-IP vendor. Apple has decided to develop GPU internally and Samsung has closed a deal with AMD to use their GPU.

IPnest is thinking about creating a new sub-category in the Interface IP, to be specific related to Die-to-Die (D2D) interconnects. D2D protocols are in discussion, it can be based on massive parallel interface or high-speed SerDes (40G to 112G) and chips are already in production from AMD or Intel.

D2D adoption can generate good business in the mid-term as chiplet can be a good work around for Moore’s law limitations.

To come back to the IP market successful companies, as already mentioned, they can be ranked in two groups:

Large EDA companies offering a one-stop-shop IP portfolio, Cadence and Synopsys, focused vendors, leader on one (or very few) product.

Let’s mention a few examples.

– Arteris IP with the Network-on-Chip (NoC), who has made 60% YoY growth, joining the Top 15 with revenues above $30 million in 2019.

– Silicon Creations, leader of the Analog Mixed-Signal (AMS) category in 2019 and 2018, the company being about ten years old and now #1 before Synopsys.

– Alphawave has been created in 2017 by a serial entrepreneur, Tony Pialis, being part of the Snowbush starting team, creating Vsemiconductor, acquired by Intel. Alphawave now enjoy $25 million revenues in 2019, based on advanced SerDes, after just two years !

– SST offering NVM IP, undisputed leader of the category, with revenues passing $100 million or more than two times the #2 revenues.

What is the secret for these IP vendors? Quality of the design (and product) is certainly the #1, being able to offer an innovative and advanced solution come right after.