Chip IP market grows despite much consolidation

Staff -- Purchasing, 7/14/2005

Global worldwide semiconductor intellectual property (IP) revenue totaled $1.27 billion in 2004, a 20.7% increase from 2003, according to market researcher Gartner. While the industry experienced strong growth, it saw significant consolidation.

"There are signs that the market is maturing," says Christian Heidarson, analyst for Gartner's semiconductor research group. "Unsuccessful players have withdrawn, there has been an increasing number of mergers and acquisitions and there is greater competition among the top vendors."

Advanced RISC Machines (ARM) extended its lead in the market with its acquisition of Artisan Components. In 2004, its revenue was more than twice the size of its nearest competitor Rambus and three times that of TTPCom, the two closest competitors.

"Microprocessors made up the largest part of the IP market, with ARM holding the largest share of the market," says Heidarson. Part of this segment's growth is attributed to the move from 2.5G to third-generation (3G) baseband designs, which will require higher-performance cores from ARM.

He adds the growth of digital video, portable consumer electronics and voice over wireless local area network (WLAN) also helped drive new licenses for MIPS Technologies, the second-largest microprocessor core supplier.