LONDON The worldwide market for semiconductor intellectual property was worth $417 million in 1999, an increase of 36 percent over 1998, according to Dataquest Inc. (San Jose, Calif.).
The market research organization's report defines the semiconductor intellectual property (IP) market as the transfer of chip designs and parts of chip designs under license and royalty contracts. Dataquest measured the IP market's size and identified the top three vendors of IP: ARM Ltd., MIPS Technologies Inc. and Rambus Inc., with IP revenues of $88.5 million, $77.2 million and $45.3 million respectively, equivalent to 51 percent of the total market.
Although ARM consolidated its position as the top-ranked IP company from 1998 to 1999, InSilicon Corp. recorded the larges t percentage growth over that span. InSilicon is the semiconductor IP group of Phoenix Technologies Inc., and was formed in 1999 by the merger of Virtual Chips and Sand Microelectronics.
Although the semiconductor IP market grew much faster than the overall semiconductor market, Dataquest's report, "Worldwide semiconductor intellectual property share rankings, 1999," warns of an industry shakeout as vendors merge or exit the business.
"The relative newness of the semiconductor IP market has led to much experimentation in business models by the various players," said Jim Tully, chief analyst for Dataquest's semiconductor worldwide group. "The uncertainty of success in this market is itself a big impediment to market growth," he said.
The report shows companies ranked separately by license and by royalty revenue, where MIPS is the clear leader, and measures the market in terms of IP type and end use. Consumer and communications applications are the most likely users of licensed IP, and the United States was the largest geographic market for IP in 1999.
Led by ARM and MIPS Technologies, microprocessor blocks dominated worldwide IP revenue in 1999, when they reached $190 million. Bus-interface blocks including PCI, USB and IEEE 1394 were the second most traded type of IP block, registering a market of $76 million.