Interface IP Category to Overtake CPU IP by 2025?

By SemiWiki

July 9, 2020

The Interface Design IP market explodes, growing by 18% in 2019, with $870 million, when CPU IP category grew by 5% at $1,460 million. In fact, Interface IP market is forecasted to sustain high growth rate for the next five years, as calculated by IPnest in the “Interface IP Survey 2015-2019 & Forecast 2020-2024”, to reach $1,800 million by 2025. Obviously the CPU IP category will not stay at the 2019 level and is expected to grow as well. But we think the CAGR 2020-2025 for CPU will be more modest, in the 4% range.

Why such a modest growth rate for the CPU IP category? The first reason is that the CPU IP market is shaky because the licensing business model is in revolt since the insertion of RISC-V CPU. The second reason is the uncertainty about ARM future revenues coming from IP sales in China (estimated to be in the 30% range), because of the exit of the JV built to support ARM IP sales in the country. This post “Tears in the Rain – ARM and JVs in China” from Jay Goldberg in Semiwiki gives very detailed explanation of the complete story. I strongly suggest you to read this post because it reflects that we were only guessing, translating a feeling into clear wording.

But the goal today is to explain why the interface IP category will see such a high growth rate until 2025. The below picture is showing that the CPU IP market share is declining since 2017 (40.8% to 37.2%) when the interface IP share is growing on the same period from 18% to 22.1%. This trend is validated during the last three years and we will see why this behavior will continue during the 2020’s.

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