Semiconductor IP 101: Understanding the Basics for a Successful Venture

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In a world ruled by products that rely on microprocessors, owning semiconductor IP can prove a stable source of revenue. This indispensable component is present in everything from cellphones to rockets, which highlights its vital nature. Companies producing unique semiconductors must consider turning them into IP to profit from their invention.   

Let us explore what semiconductor IP means and the two ways to monetize it. 

Table of Contents

Defining Semiconductor IP 

Also referred to as IP Core or IP Block, Semiconductor Intellectual Property Core (SIP core) refers to the reusable design specifications unit of logic, cell, or integrated circuit layout design that is patented by a company. The IP of a semiconductor comprises any specifications, source code, or other data necessary to reproduce and manufacture it.  Once the process of creation, preservation, and presentation of a semiconductor is patented, the IP can be sold or licensed.  

Types of Semiconductor IP 

There are two types of IP cores: 

Hard IP: The documents, designs, instruction material, and blocks of code that are created during the design and invention of a semiconductor constitute its Hard IP. The information provided by this form of IP can be used by others to replicate the semiconductor. Emphasis must be paid on safeguarding Hard IP through appropriate patents in order to avoid unauthorized reproduction. Once patented the IP may be sold or licensed, depending on the company’s objectives.  

Soft IP: Any documentation created during the invention/manufacturing/use of a semiconductor falls under this category. Maintenance records, software records, or testing manuals are all Soft IPs that must be secured. Soft IP is proof that an organization is using patented technology. The process of turning soft IP into physical reference is called ‘hardening’. 

Semiconductor Market Outlook 

The worldwide semiconductor market was valued at US$ 5.9Bn in 2021 and is expected to reach US$ 12.3Bn by 2032. This is proof of the fast pace at which this market is expanding. The increasing demands in the automotive, telecommunication, and electronics sectors are in turn fueling the demand for semiconductors. From the 5G technology to electric and automated vehicles, microchips are ubiquitous, thus placing the semiconductor industry in a sweet spot.

Semiconductor Industry Association (SIA)  

A trade and lobbying group founded in 1977, the SIA represents the semiconductor market in the USA. The goal of the organization is to coordinate and streamline the activities of member companies and offer the latest technological trend updates. With more than 100 members, the association focuses on industry statistics, environment, safety, and occupational health, domestic policy and economy, technology workforce and education, and world markets. 


Considering the importance of semiconductor IP, it is imperative to protect it from being stolen. A business could lose out on significant earnings if they are not able to safeguard its IP. With nearly 30000 patents in the US alone, there is a sharp surge in semiconductor patenting. It is therefore the right time to make a move in this highly lucrative field with the right semiconductor IP.  

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