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Semiconductor Industry Headed for Strong 2014: Forecaster

Comments(0)Filed under: EDA tool vendors, Electronic Design Automation, EDA companies, Brian Fuller, Internet of Things, semiconductors, EDA vendors, electronics design, IT spending, semiconductor design, IC design, EDA software, semiconductor ip, semiconductor ip companies, semiconductor companies, semiconductor memory, computer design, IP blocks, ip cores, Semico Research, Jim Feldhan

SAN JOSE, Calif.-- The semiconductor industry is headed into the home stretch for calendar 2013, and it's at this point in the story that the question always arises, "what's next year going to look like?"

Forecaster Jim Feldhan, founder of Semico Research, thinks it's going to be a really solid year.

Feldhan, speaking this week at his company's annual IP Impact Summit here, based his bullishness on his company's Inflection Point Indicator (IPI), a mathematical model (chart right) that uses current electronics industry data such as bookings, billings, and backlog to predict industry performance roughly a year in advance.

Feldhan said:

"What we're really excited about is what we've seen over the last 8-10 months is a very strong increase for the IPI, which gives us a very strong indication that next year, 2014, will be a much better year."

For 2013, the semiconductor industry is on track for a 6% growth rate, mostly from the memory segment, where DRAMs are having their best year in 3-4 years (up 37% this year), Feldhan said.

Next year, the "the memory market will moderate and logic will pick up," he said.

The IPI suggests 2014 should yield growth of 8-10 percent for the semiconductor industry, Feldhan forecasts. That would put worldwide revenue next year at a little more than $350 billion.

When it comes to the industry's growing IP segment, Feldhan was even more bullish.

IP Growth Cited

In 2012, the IP segment grew 21% to $4 billion and should experience the same growth this year, Feldhan said. Thanks to an ancitipated 19% compound annual growth rate in the coming years, IP will crack $8 billion in revenue by 2017, he added.

He also noted that the royalties, as a percentage of total segment revenue (see second chart, right), is about to surpass the percentage of licensing fees, meaning more cores are entering volume production inside system-on-chip (SoC) designs.

And for anyone involved in design or verification, Feldhan's next growth indicator was familiar: By 2017 there will be an average 180 IP blocks per design, more than triple the average at the beginning of the decade.

"That really adds a lot of challenge to our design community," Feldhan said, noting that designers are increasingly leaning on IP subsystems to ease the complexity of IP integration within SoCs.

By 2017, subsystem IP will comprise $1.2 billion of the forecast $8 billion overall IP market, he noted.

Brian Fuller

Related stories:

--The Future's in Our Hands; Let's Not Blow It

--Cadence CEO at DAC 2013: 'I've Doubled, Tripled Down on Semiconductor Investment' 


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