Institution: Global chip design IP sales in 2021 will increase by 19.4% year-on-year to $5.45 billion

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

Clearly, the growth of Synopsys and Alphawave confirms the importance of the wired interface IP market (22.7% growth in 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.

Looking back at the development of the IP market from 2016 to 2021, it is possible to obtain information on the main trends of the IP market. The global IP market grew by 59.3%, while the growth of the top three vendors was 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 a 50% increase in 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 IP vendor rankings based on licensed and royalty IP revenue:

In terms of IP licensing revenue, Synopsys ranks first with a 31.2% market share in 2021, while ARM ranks second with a 25.6% market share. 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, you can see that both can be successful and follow different strategies and market positioning.

The 2021 royalty rankings show ARM dominating the market with a 60.8% market share, which isn't surprising when one considers 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 19.4% year-over-year in 2021, proving that this segment is very strong in the semiconductor market, while the past 9.8% CAGR between 2016 and 2021 is a good measure. IPnest also made a forecast (not yet announced) for the next 5 years of design IP, that the design IP market will reach $11 billion in 2026, with a compound annual growth rate (2021 to 2026) of 15%.