Semiconductor IP: Decoding the Reasons behind the Growing Emphasis of Businesses on IP Rights

1 Mar



  • Introduction 
  • Disruptions in global supply chains
  • Competitive spirit of the semiconductor manufacturing sector
  • The role of North America and Asia-Pacific regions in the growth of the industry
  • Product launches and business offerings in the domain

Semiconductor intellectual property, also called semiconductor IP or SIP, is an intellectual property associated with chip design specifications of logic or cell layout of a semiconductor microprocessor. Semiconductor intellectual property can be claimed by the company that invented the design or the inventing company can license the design to other entities for future use. Thus, semiconductor IP is an important source of revenue for companies to invent or develop a new microprocessor chip design.

The documentation prepared during the manufacture and design of semiconductor chips, which includes maintenance logs and testing guides, is generally categorized as ‘soft intellectual property’ or ‘Soft IP’. This documentation is then transformed into company-authorized documents, design codes, instruction materials, etc. These documents and codes are classified as ‘hard intellectual property’ or ‘Hard IP’. A company can patent these documents and codes which can then be licensed to other companies. Hence, to patent the creation, presentation, and preservation of the semiconductor IP design, the procedures that were followed during the designing phase should be documented properly. Moreover, the design ownership records should be maintained so that once patented, licensing can be done seamlessly.

How did disruptions in global supply chains play a role in the rise of the industry?

During the COVID-19 pandemic, various countries imposed strict lockdowns and import-export restrictions that hampered global trade massively. The global supply chains that were established at the start of the globalization era were completely disrupted during the pandemic. Since only a handful of countries control most of the semiconductor chip supply, the disruptions in global trade and logistics had a terrible effect on the semiconductor manufacturing sector.

In the post-pandemic period, due to geopolitical tensions created by the Russia-Ukraine conflict and the Israel-Palestine war, these supply chains were deliberately blocked by countries engulfed in these conflicts in response to the economic sanctions imposed on them. Moreover, many geopolitical experts point toward the rising tensions between China and Taiwan which might further worsen the situation for the semiconductor sector as Taiwan is the major supplier of microchips.

Considering all these factors, many companies have actively started investing both time and money in R&D activities related to semiconductor design. A major surge in investments in chip design software, semiconductor manufacturing equipment, semiconductor foundry, etc., has been recorded in the past few years. This increasing investment in semiconductor design is expected to contribute to the growth of the semiconductor IP industry in the coming period.

Competition among the semiconductor manufacturing companies helping the market flourish

Apart from the disruptions in global supply chains, high competition between the different companies in the semiconductor manufacturing sector has also played a major role in the growth of this domain. Multinational semiconductor manufacturing giants such as Synopsys, Inc., ARTERIS INC, ALPHAWAVE SEMI, Faraday Technology Corporation, Cadence Design Systems, Inc., etc., have engaged in alliances that have helped in the expansion of the sector.

For instance, in August 2023, Nordic Semiconductors, a leading Norway-based fabless technology manufacturer, announced the acquisition of Atlazo, a major AI/ML processor and sensor manufacturing company. As per the statement released by Nordic Semiconductors, this acquisition will help the company increase its footprint in the sector in the coming period.

Analyzing the domination of Asia-Pacific and North America over the industry

As said earlier, owing to the problems faced during the pandemic and post-pandemic years, several countries have ramped up their semiconductor manufacturing capabilities. North America, especially the U.S., has traditionally been a leader in semiconductor manufacturing technology and has helped the region to dominate the sector in 2022. However, in the past few years, the Asia-Pacific region has witnessed tremendous growth and is set to grow at the fastest rate in the 2023-2032 timeframe. Countries like China and India have invested heavily in this domain and encouraged research institutes to register semiconductor patents. Owing to such proactive steps, the India semiconductor IP industry is anticipated to rise at a CAGR of 12.26% during the 2023-2032 period.

How has the private sector played a role in strengthening the Industry `s position?

Along with the governmental support received by this sector, private companies have also played a huge role in the growth of this sector. Many companies have launched their research labs and products which have pushed the growth rate of the domain higher. For instance, in May 2021, Imagination Technologies, a semiconductor design company, announced the launch of IMG labs to further research and innovation in semiconductor design. The company aims to develop semiconductor design technologies that will help in the manufacturing of futuristic semiconductor chips.

To summarize, semiconductor intellectual property rights have come into focus in recent times owing to the disruptions in global supply chains caused by different reasons. Furthermore, the competitive spirit of the industry has also played a huge role in the growth of the domain.

To get an in-depth analysis of the growth drivers and investment opportunities in the sector, feel free to contact us.

Koyel Ghosh

Koyel Ghosh

Author’s Bio- Koyel Ghosh is a blogger with a strong passion and enjoys writing in miscellaneous domains, as she believes it lets her explore a wide variety of niches. She has an innate interest in creativity and enjoys experimenting with different writing styles. A writer who never stops imagining, she has been serving the corporate industry for the last five years.


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