My previous posts about market share calculations where I used USD $35B edge AI hardware processor figure from VDC Research are incorrect.
That's the TAM for actual processors & BRN revenue will be about 3% royalty per processor + 2% licencing per processor.
(ARM licencing revenue is 40% of total revenue & royalties are 60%)
Another report by Markets & Markets mentions that the global edge AI hardware market will grow at 20.8% CAGR to 2.716B units by 2027. So by 2030 at 20.8% CAGR there will be 4.787B units.
The global Edge AI Hardware Market Size in terms of revenue was estimated to be worth $24.2 billion in 2024 and is poised to reach $54.7 billion by 2029, growing at a CAGR of 17.7% during the forecast period.
www.marketsandmarkets.com
Using USD $35B from VDC Research / 4.787B units by 2030 = $7.31 per processor x 5% BRN royalty/licencing revenue = 36.55c per processor revenue = 55.51c AUD.
Each 1% = 47.87M units x 55.51c = $26.57M IP royalties/licencing revenue.
So about 10% market share = $265.7M royalties/licencing
$265.7M revenue x 60% EBITDA = $159.42M EBITDA less 21% US corporate tax = $125.94M NPAT X PE60 = $7.556B MC / 1.8B SOI = $4.20 SP.
(NPAT of 60% of revenue previously mentioned for ARM is incorrect. Confirmed as EBITDA)
Edge AI hardware processor global market TAM of AUD $53.1B x IP royalty/licencing revenue of 5% = AUD $2.655B in 2030.
Reviewed two market research reports for global semiconductor IP market to identify TAM. One mentions TAM of $10.93B AUD in 2026 @ 5.4% CAGR = $13.5B in 2030 & the other mentions $12.95B AUD in 2029 @ 8.1% CAGR = $14B in 2030. In 10 years in 2033 the semiconductor IP market TAM will be $17.7B AUD @ 8.1% CAGR.
The global Semiconductor Intellectual Property (IP) Market size in terms of revenue was estimated to be worth $7.5 billion in 2024 and is poised to reach $11.2 billion by 2029, growing at a CAGR of 8.5% during the forecast period.
www.marketsandmarkets.com
The global semiconductor IP market is projected to grow from $4.95 billion in 2022 to $8.53 billion by 2029, at a CAGR of 8.1% in forecast period, 2022-2029
www.fortunebusinessinsights.com
Renesas IP is mentioned in the above report offering a wide range of IP solutions for various microcontroller units (MCU's) & system-on-chip products (SoC's).
Edge AI hardware processor IP market TAM of $2.655B AUD / $14B semiconductor IP market TAM in 2030 = 19% of IP market in 2030 will be for edge AI hardware processors.
VDC Research mentioned edge AI hardware processor market TAM of $35B USD = $53.1B AUD . Markets & Markets mentions $59B AUD edge AI hardware processor market in 2030 @ 18.8% CAGR so in 10 years by 2033 will be $98.9B or about $100B AUD TAM.
The global edge AI hardware market size was valued at $6.88 billion in 2020, and is projected to reach $38.87 billion by 2030, registering a CAGR of 18.8% from 2021 to 2030. The key players profiled in the edge AI hardware market report include Apple, Google, Huawei, Intel, IBM, and many more.
www.alliedmarketresearch.com
$100B AUD edge AI hardware processor market TAM x 5% IP royalty/licencing market TAM = $5B / $17.7B IP global TAM = 28.25% of IP market in 2033 will be for edge AI hardware processors.
In 10 years 10% market share of $5B IP royalty/licencing TAM = $500M revenue x 60% EBITDA = $300M less 21% US corporate tax = $237M NPAT x PE60 = $14.22B MC / 1.8B SOI = $7.90 SP.
With 12% market share = $600M revenue x 60% EBITDA = $360M less 21% tax = $284.4M NPAT x PE60 = $17.06B MC / 1.8B SOI = $9.48 SP.
So about 50c to $10 SP = x20 in 10 years for 12% market share based on $5B AUD IP royalty/licencing market TAM.
$17.7B semiconductor IP market TAM in 2033 @ 8.1% CAGR = $26.12B in 2038.
$100B edge AI hardware processor market TAM in 2033 @ 18.8% CAGR = $236.6B x 5% IP royalty/licencing market TAM = $11.83B in 2038.
$11.83B / $26.12B = 45.3% of IP market in 2038 will be for edge AI hardware processors.
$11.83B in edge AI hardware processor IP market TAM in 2038 x 12% market share = $1.42B revenue x 60% EBITDA = $852M less 21% US corporate tax rate = $673.1M NPAT x PE60 = $40.4B MC / 1.8B SOI = $22.44 SP.
Will be $28B in edge AI hardware processor IP market TAM in 2043 x 12% market share = $3.36B x 60% EBITDA = $2B less 21% tax = $1.58B NPAT x PE60 = $94.8B MC / 1.8B SOI = $52.67 SP.
And according to these reports the edge AI hardware processor IP market will grow much faster than the semiconductor IP market. From 19% market share in 2030 to 45.3% in 2038 of total semiconductor IP market.
The $53-59B AUD mentioned for edge AI processor market TAM in 2030 is from known applications today without factoring in new applications in future so it could be higher.
ARM took about 20 years for revenue to rise to USD $746M in a quarter = about USD $3B pa.
Still early days for BRN. Looks like BRN is a long term hold.