Semiconductor IP (Intellectual Property), also commonly known as IP core, refers to the pre-designed and verified functional modules in the chip design, mainly serving the chip design, because some general functional modules are repeatedly used in the chip, the semiconductor IP is such a pre-designed functional module, so as to use special software and semiconductor IP in the chip design to shorten the chip design cycle and reduce the development cost.
As the most upstream of the industry chain, there is no doubt about the importance of IP to the semiconductor industry. In 2022, the global IP market achieved more than $5 billion in sales, but it drove $500 billion in global semiconductor sales, in other words, every $1 of IP spending can drive and support 100 times the value of the chip market.
IP is the core industrial element and competitiveness embodiment of the integrated circuit design industry due to its high performance, excellent power consumption, moderate cost, high technology intensity, concentrated intellectual property rights, and expensive commercial value.
However, in this industry, Asia-Pacific brands are limited by their late start, and their market share is much lower than that of international giants. At present, the global semiconductor IP industry is highly concentrated, with the total market share of the top three reaching 66.2%. ARM has an absolute advantage in processor IP and also maintains a significant lead in royalty revenue, with a market share of more than 40.4%, followed by Synopsys and Cadence in second and third place.
In the era of artificial intelligence, the importance of the integrated circuit industry has been continuously highlighted. With the advent of a new round of industry cycle, the integrated circuit industry will usher in growth opportunities. In the integrated circuit industry chain, the IP located in the most upstream is undoubtedly the first to feel the changes in the market.
Chen Wanyi, chairman of Kuixin Technology, a supplier of integrated circuit IP and chiplet products, said that the development hotspot of the IP market is shifting from processor IP to interface IP, and from IP to chiplet. In the process of changing technology hotspots, startups will usher in new development opportunities.
Incorporated in Shanghai in 2021, M SQUARE is a professional supplier of integrated circuit IP and chiplet products. We are committed to solving the problem of chip interconnection and vertical integration of applications in the era of smart economy. At present, the company has more than 170 employees, 80% of whom are R&D personnel, and has received a round A investment of over 100 million yuan in January 2023.
Chen Wanyi, chairman of Kuixin Technology, believes that although the self-sufficiency rate of the Asia-Pacific IP market is still very low, it can still rely on the huge mature local application market and independent and controllable advantages, and narrow the gap with international mainstream manufacturers through customized services and technical support advantages.
The semiconductor industry is facing market changes
With the development of artificial intelligence technology, autonomous driving, AI servers and other fields have ushered in explosive growth, and the semiconductor industry, as the basic hardware, has also ushered in a huge change in the market and technology.
On the one hand, the advent of the upward cycle of the semiconductor market and the development of artificial intelligence have made interface IP a hot spot in the market.
The semiconductor industry is a typical cyclical industry, with a cycle length of about 4 years, with an upward cycle of usually 2 to 3 years and a downward cycle of 1 to 1.5 years. The upward range of this cycle is from the third quarter of 2019 to the second quarter of 2022, and the downward range is from the second quarter of 2022 to 2023, and it is generally in the destocking stage. A research report from an industry brokerage said: the end of active destocking, and the semiconductor industry will emerge in 2024 with an upward signal. The overall supply adjustment is in place, with the steady rise in demand, chip prices are expected to bottom out, and the semiconductor industry chain is about to open an upward channel.
Specific to the IP industry, according to market US forecast, the global IP industry market size will be US$6 billion (about 40 billion yuan) in 2022, with an average annual growth rate of about 6.7% between 2023 and 2032, and the global integrated circuit IP industry market size will reach more than US$11 billion by 2032.
In the IP industry, the most rapidly developing is interface IP. In the past decade, smartphones have been a powerful driving force for the IP industry, and processor IP has become the IP type with the highest market share, but with the explosive growth of interconnection demand for data centers and artificial intelligence in recent years, interface IP has become the fastest growing category. According to the report, between 2017 and 2022, interface categories accounted for 24.9% of all IP, while processors such as CPUs, GPUs and DSPs decreased from 57.6% to 49.5%. IPnest also predicts that the market share of interface IP is expected to surpass that of CPU in 2025 and become the No. 1 IP category, which shows the huge potential of this sub-category.
At the beginning of its establishment, Kuixin Technology aimed at interface IP as its core business, and has successively launched LPDDR, PCle, SerDes, MIPI, USB, HDMI, DP, HBM and other interconnection interface IPs, covering more than 400 different process nodes from 6nm to 180nm and multiple fabs.
Chen Wanyi, chairman of Kuixin Technology, said that interface IP is the most indispensable component of the chip field in basic hardware. In terms of trends, modern data centers are shifting from CPU-centric to AI computing-centric. Driven by the growing computing demands in AI, there is a growing demand for multi-node, multi-GPU/AI systems that enable seamless, high-speed communication between each GPU/AI chip. To create an end-to-end computing platform that is powerful and capable of meeting the speed demands of business, scalable, fast interconnects are essential.
Therefore, Chen Wanyi believes that with the rapid development of the semiconductor industry and the development of AI, the interface IP market will usher in a broader space for development.
Chiplet opportunities
On the other hand, technological changes have allowed international companies and startups to compete on a level playing field.
In 2023, the biggest technological change in the semiconductor market is the rise of chiplets. Chiplet, commonly known as chiplet, is a type of die (die) that meets specific functions, and through die-to-die internal interconnection technology, multiple module chips and underlying basic chips are packaged together to form a system chip to achieve a new form of IP multiplexing.
With Moore's Law gradually failing, chiplet technology has become a hot spot in the semiconductor industry. Through the inter-chip integration of multiple chips, chiplets can break through the upper limit of traditional single chips and further improve the integration of chips, which is regarded as a key technology to continue Moore's Law. For the industry, its value lies in the fact that chip design companies only need to design a small number of functional units to build a product series platform, which can greatly reduce the cost of R&D and mass production.
Chen Wanyi revealed that Kuixin Technology regards Chiplet technology as an important development direction of the semiconductor industry in the future, and has been actively deployed on a global scale. She believes that large-scale high-performance chips representing cloud and mobile hardware technologies are approaching or exceeding the maximum mask size, reducing the risk and cost of product evolution and speeding up time to market is always an urgent need for customers. In the post-Moore era, the application of Chiplet architecture will gradually sink from the cluster data center side to the edge and terminal side (mobile phones, automobiles, etc.), and large-scale high-performance chips will continue to promote the evolution of Chiplet technology.
Kuixin Technology product architecture
In order to promote the development of Chiplet technology, Kuixin Technology has established offices in Brisbane, Australia, San Jose, USA and other places to strengthen cooperation with international advanced enterprises. Its chiplet interconnection solution is based on D2D (UCIe) IP and 2.5D chip M2 IOD, which has the advantages of high bandwidth, low latency, low power consumption, etc., and supports a variety of package forms.
Ecological cultivation of IP enterprises
In addition to the uniqueness of each technology, the competition between IP companies also depends on the ability to build an ecosystem. In addition to core IP such as CPU and GPU architecture, the core factor for Arm to become the king of the mobile era is that it has established an integrated ecosystem of "IP-chip-application" with downstream partners, thus forming high market barriers. In 2022 alone, Arm signed 1,767 licensing agreements and has accumulated more than 450 customers in the past five years, including IBM, Qualcomm, NVIDIA, Microsoft, Apple and other world-renowned companies, which provides the foundation for it to build a comprehensive ecosystem supply chain.
Asia-Pacific manufacturers want to compete with giants in the industrial chain, and building an ecosystem is a threshold that cannot be bypassed.
Chen Wanyi, chairman of Kuixin Technology, said that as an upstream enterprise in the supply chain, Kuixin Technology has always paid attention to close cooperation with downstream enterprises, and has built strategic alliances with XPU companies around the world to jointly promote the construction of computing infrastructure. At the same time, Kuixin Technology also carries out technical cooperation with the world's leading wafer factories and packaging and testing factories to jointly develop new processes.
Chen Wanyi, chairman of Kuixin Technology
In the layout of downstream channels, Kuixin Technology focuses on the main tracks including AI servers, smart cars, AIPC and smart phones in consumer electronics. These areas are important driving forces for the growth of the current semiconductor industry, and they are also the focus of Kuixin's global strategic layout.
Chen Wanyi is full of confidence in the overall development of the company: "In the long run, Kuixin Technology's vision is to become the world's leading supplier of integrated circuit IP and chiplet products. According to the evolution trend of the chip industry, we will continue to build chiplet products based on interconnection IP and actively respond to the rapidly developing needs of chips and applications. At the same time, we will also actively participate in global industrial cooperation and standard formulation, and make greater contributions to promoting the healthy development of the semiconductor industry. ”