Chip Talk > Silicon IP's Unstoppable Growth Amidst EDA Challenges
Published July 15, 2025
The semiconductor IP market has been experiencing a renaissance, with Q1 2025 figures showcasing a formidable 29.6% year-over-year growth, reaching $1.577 billion. This marks an exceptional phase for the silicon IP segment, buoyed by expansive utilization in multi-die solutions and complex SoCs used extensively in AI data centers. Source: Semi Engineering.
The boost in silicon IP revenue can be largely attributed to innovations in chiplet-based designs. By enabling modular design approaches, chiplets have stormed the semiconductor arena, allowing manufacturers to customize and upgrade individual components more efficiently. This flexibility is crucial in an era where the demand for robust, high-performance computing solutions is soaring, fueled by AI advancements and evolving data centers.
Notably, leading tech firms, including those offering proprietary IP like Arm, have seen substantial revenue gains, reflecting the ongoing demand for their offerings.
Contrasting the boom in silicon IP, the Electronic Design Automation (EDA) market faced plateauing growth, increasing just 2.6%. Noteworthy is the dip in physical design and verification revenues, decreasing by nearly 10%. This downturn contrasts with the overall positive trajectory observed in IP.
Such challenges have been partly attributed to the shifting needs within the market, where less emphasis is being placed on traditional verification, thanks to evolving design methodologies in the IP segment. Yet, this omits the broader discussion about integration complexities and the nuanced challenges in adapting to these new IP-centric designs.
Diving deeper into regional growth patterns, Asia/Pacific's EDA and IP market grew at a mere 8.2% relative to 17% in the Americas, indicating regional variances affecting the tech ecosystem at large. Despite these geographic disparities, employment within the sector remains robust, indicating that fears of AI usurping engineering roles might be overblown.
Employment figures rose by 4.5%, drawing some optimism about the sector's adaptability and resilience amidst technological shifts.
Looking ahead, the sustained growth in silicon IP suggests a continued pivot towards more modular, high-performance systems. As IP becomes a more integral component of semiconductor manufacturing, companies face the dual challenge of maintaining cutting-edge innovation while ensuring processes remain efficient and streamlined.
Additionally, as reported by Walden Rhines at SEMI's recent conference, the evolving landscape necessitates strategic adaptations by firms to accommodate new standards and seamlessly integrate IP blocks.
In conclusion, while the EDA market may have hit a rough patch, the overall outlook for silicon IP remains exceptionally bright. Companies deeply embedded in this space are poised to reap the benefits of technological advancements in the semiconductor sector. This period of growth underscores the importance of adaptability and innovation in navigating today's competitive tech landscape.
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