Semiconductor IP Market Projected to Hit $18.64 Billion by 2032

The global semiconductor intellectual property (IP) market is poised to double in size over the next seven years as the industry pivots toward custom silicon. This expansion reflects a fundamental shift in chip design, driven by the urgent need to optimize hardware for specialized artificial intelligence workloads.

According to a report from MarketsandMarkets, the semiconductor IP market was valued at USD 9.30 billion in 2025 and is projected to reach USD 18.64 billion by 2032. This trajectory represents a compound annual growth rate (CAGR) of 10.2% from 2026 to 2032. Currently, fabless semiconductor companies account for the largest share of the market, utilizing these pre-designed, reusable building blocks—known as IP cores—to develop complex System-on-Chips (SoCs) without starting from scratch.

The Shift Toward Custom Silicon

This growth occurs against a backdrop of diversifying chip architectures. For decades, the industry relied heavily on proprietary designs, such as those from ARM or x86. However, the rise of hyperscalers—including Google, Amazon, and Microsoft—and the automotive sector has triggered a move toward custom silicon. These companies are increasingly designing their own AI accelerators to gain performance and efficiency advantages that off-the-shelf components cannot provide.

Parallel to this is the ascent of RISC-V, an open-source instruction set architecture. By reducing reliance on expensive proprietary licenses, RISC-V is democratizing the design process. The impact is already visible in the embedded processor market; RISC-V-based chips are estimated to capture 20% of that market by 2027, a significant jump from approximately 5% today.

Industry Implications

The acceleration of AI is transforming the semiconductor IP market from a niche utility into a strategic pillar of the tech economy. As more firms move toward custom-built hardware, the demand for flexible, licensable IP increases. This shift allows companies to innovate more rapidly and reduce the prohibitive costs associated with traditional proprietary licensing, effectively lowering the barrier to entry for specialized hardware development.

Future Outlook

Looking ahead, the market's trajectory will likely be dictated by the continued adoption of open-source architectures and the scaling of AI infrastructure. While the overall market growth is steady, the speed at which RISC-V displaces proprietary incumbents in the embedded space will be a key metric for analysts. Industry observers will be watching to see if this trend extends beyond embedded systems into more general-purpose computing as the push for hardware-software co-optimization intensifies.