Top 10 global IP vendors: latecomers are eyeing the market
Latest update time：2020-03-27
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Recently, market analysis company IPnest released the revenue rankings of global semiconductor IP manufacturers in 2019. The list focuses on the revenue, year-on-year growth and market share of the top 10 IP manufacturers.
Overall, the total value of the global semiconductor IP market in 2019 was approximately US$3.94 billion, up 5.2% from US$3.74 billion in 2018. Considering that the semiconductor market fell by about 15% in 2019 and IP royalties are usually linked to chip sales prices, the performance shown in this list is already a good result for IP suppliers, indicating that the penetration rate of IP in the semiconductor market has further increased.
Figure 1: Top 10 IP companies and revenue in 2019 (million USD), Source: IPnest
As can be seen from Figure 1, in 2019, the total revenue of the top 10 manufacturers accounted for 78.1% of the global total sales, and the situation of the big getting bigger is still stable. And it increased by 4.2% year-on-year (in 2018, the top 10 revenue increased by 4.1% year-on-year). In the context of the overall downturn in the semiconductor market, it is indeed a good situation to achieve positive growth, indicating that the vitality of the IP market is increasing and has great development potential.
Although the concentration of revenue is still very high, the revenue share of the top 10 manufacturers has slightly decreased compared with 2018, as shown in the figure below.
Figure 2: Top 10 IP companies and revenue in 2018 (million USD), Source: IPnest
As can be seen from Figure 2, the revenue share of the top 10 manufacturers in 2018 was 80.1%, slightly higher than that in 2019, and 84.6% in 2017. It can be seen that this figure is decreasing slightly year by year, which is a gratifying state, indicating that the number of market participants is increasing and the competitiveness is gradually strengthening. In particular, the addition of fresh blood is conducive to the healthy development of the entire industry.
In addition, judging from the rankings of the past two years, only one company has emerged as a dark horse, that is SST, which jumped from outside the top 10 in 2018 to fourth in 2019, while the rankings of the other nine manufacturers have not changed significantly.
Traditional strong player
For many years, Arm and Synopsys have ranked first and second in the global IP market, and their position is very solid.
According to IPnest data, Arm once controlled 50% of the IP market and has always been in a leading position, but its market share has declined in the past two years, from 44.7% in 2018 to 40.8% in 2019. Synopsys, which ranked second, saw its revenue increase by 13.8%, winning 18.2% of the market share. Cadence, which ranked third, saw its IP revenue increase by 22.9%, bringing the company a 5.9% market share.
Arm continues to lead the market in total IP revenue as its patent royalties exceed billions each year, significantly exceeding its competitors. However, amid increasing market competition, Arm's total IP revenue declined slightly in 2019, similar to what happened in 2018 and 2017.
Eric Esteve, head of IPnest, said the reason for the decline in Arm sales is not the arrival of RISC-V alternatives, but the growing importance of non-processor forms of IP, for which he also wrote a 2019 annual report on the state of the semiconductor IP market.
Esteve said: "In the sluggish semiconductor market atmosphere in 2019, Synopsys maintained stable growth. After removing memory and considering only logic, analog and SoC, the market fell by about 6%. Therefore, my conclusion is that the IP business is healthy overall." Esteve also pointed out that Synopsys surpassed Arm in terms of upfront licensing of IP cores.
In recent years, Synopsys has attached great importance to IP asset mergers and acquisitions to enrich its own strength. For example, in 2016, the company acquired Gold Standard Simulations Ltd (GSS), a spin-off company of the University of Glasgow that specializes in the development of TCAD software for nanoscale electronic devices. In January this year, Synopsys also acquired certain basic and analog IP assets of Invecas. Synopsys said that the acquisition will expand its DesignWare logic library, general I/O, embedded memory, interface and analog IP product portfolio. The transaction is expected to be completed in the first half of fiscal 2020.
In addition, Synopsys has acquired certain assets of DINI Group, QTronicGmbH and eSilicon.
Despite the low base, Cadence managed to increase its total IP revenue by 22.9% year-over-year. Esteve said this was partly due to the company having 4-5 IP product lines and also because of the success of the Tensilica processor/DSP product line. Cadence also acquired NuSemi Inc. in late 2017.
New growth point
For most of the past decade, the growth of the IP business has been driven by smartphones, so companies such as Arm, Imagination and Ceva have performed very well. However, the smartphone industry has recently put downward pressure on component suppliers, reducing profits, which in turn has affected upstream IP suppliers.
Esteve said: "In the next few years, the growth sources of IP revenue will be high-performance computing and data centers, wired and wireless networks. In addition, the Internet of Things will also affect the market, but the impact is limited." Among these high-performance applications, the importance of interface IP is growing, and its share of the entire IP market is eroding processor IP, becoming the IP category with the most development potential. The details are shown in the figure below.
Figure 3: The evolution of semiconductor IP categories over time shows that interface IP such as SerDes is increasing in importance as processor IP market share decreases. Source: IPnest
After the processor, physical IP, wired interface IP, SRAM memory compiler, other memory compiler, physical library, analog and mixed signal, and wireless interface IP are all new growth points. In the wired interface category, Synopsys is the clear leader, with about 45% market share in 2018, and about 35% market share in the physical IP market.
In April 2019, Esteve said: "We saw in 2018 that the market is shifting from general-purpose IP (such as CPU, DSP, basic IP) to more application-specific IP, especially for CPU or DSP. Synopsys, Cadence, Arm and Andes are competing in these areas, and the competition is becoming more intense. It is also worth noting that the proportion of processor and physical IP revenue in total revenue is declining, while other digital IP and interconnect IP are growing."
Unstoppable RISC-V
The open source instruction set architecture (ISA) RISC-V is not on the IPnest list.
Each processor has its own ISA, which may come from Arm, Intel, AMD, nVidia, etc. However, unlike the proprietary ISAs of these commercial processors, the open source RISC-V ISA is free for anyone to use. They can use it as the basis for their own processor implementation without having to pay for a commercial processor. In other words, anyone can use the RISC-V ISA to make a processor to sell as an off-the-shelf physical device or to license it as an IP core for use in other people's SoC designs.
The appeal of RISC-V is that you can develop your own dedicated SoC without paying an upfront fee, which means the cost of entry is low, but not zero. Users still need to pay for tools, testing, and verification to add processor IP to their designs, but there is no licensing fee for the ISA itself.
In recent years, RISC-V has developed rapidly, and many companies have begun to provide chips and IP products around it.
“Many vendors are offering RISC-V-based MCUs, but these are not part of the IP market,” Esteve said. “However, there are IP products for RISC-V. Although RISC-V has great potential, it is not easy for them to find a good business model.”
Regarding the competitive relationship between RISC-V and Arm, Esteve said: "The more than 100 designs provided by Si-Five, the representative company of RISC-V, cannot be compared with the billions of Arm-based chips delivered each year." Arm has also publicly stated that in 2017, there were more than 1,600 authorized partners, an increase of more than 100 each year, and the shipment volume of chips containing Arm IP exceeded 21 billion.
Although open architecture will attract many customers. However, Arm reminds users that the biggest problem with RISC-V is the hidden open source costs of verifying and implementing the instruction set and processor architecture. Arm points out that they have a very stable and mature ecosystem to support its processor development, while open source does not (at least not yet).
However, Esteve also admitted that RISC-V will become a strong competitor to Arm in the next few years.
The emergence of open instruction set architecture IP like RISC-V has spurred momentum in open source hardware processor development. For example, the newly formed OpenHW aims to increase awareness, understanding, and availability of open source processor implementations.
OpenHW is a non-profit global organization that hopes to help the adoption of open source processors by "providing a platform for collaboration, creating a focal point for ecosystem development, and making open source IP available for processors." The first sponsors of OpenHW include Alibaba, Bluespec, CMC Microsystems, Embecosm, ETH Zurich, GreenWaves, Imperas, Metrics, Mythic, NXP, Onespin, Silicon Labs, and Thales.
Last December, OpenHW announced the CORE-V Chassis SoC project, which includes the CORE-V series of open source RISC-V cores. These IP cores and related tools consist of a 64-bit processor and a 32-bit coprocessor with Linux capabilities, designed to accelerate the design process and ensure manufacturability for high-volume chip production.
OpenHW plans to launch a multi-core processor evaluation system-on-chip (SoC) capable of running the Linux operating system in the second half of 2020. As mentioned above, the CORE-V chassis will use a CV64A 64-bit core running with a CV32E 32-bit coprocessor core. The 64-bit CV64A core is based on the Ariane implementation of the RV64GC RISC-V core IP from ETH Zurich. RV64GC is also used by many other RISC-V projects, including SiFive's U54.
*Disclaimer: This article is originally written by the author. The content of the article is the author's personal opinion. Semiconductor Industry Observer reprints it only to convey a different point of view. It does not mean that Semiconductor Industry Observer agrees or supports this point of view. If you have any objections, please contact Semiconductor Industry Observer.
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