Chip Design Services Market (2026-2036)

The growth of this market is mainly driven by the rapid growth of custom AI accelerators and application-specific integrated circuits (ASICs) for hyperscalers, the rising complexity and cost of chip design at advanced process nodes, the shift to chiplet-based architectures and advanced packaging, and the growing use of custom silicon in automotive, communications, and consumer electronics. In addition, the shortage of experienced chip design engineers, government programs to build domestic design capabilities in India, the U.S., Europe, and other countries, and the adoption of AI-assisted design tools are further supporting the growth of this market.

The Chip Design Services Market, also referred to as the semiconductor design services, ASIC design services, or VLSI design services market, comprises the engineering services provided by third parties to design integrated circuits for semiconductor companies, system companies, and hyperscalers. The market includes architecture and specification; front-end design, including RTL design; design verification; physical design and implementation; design for test (DFT); analog and mixed-signal design; IP integration and customization; chiplet and advanced packaging design; post-silicon validation and test; and embedded software and firmware. These services are delivered through turnkey ASIC engagements, design-only or non-recurring engineering (NRE) engagements, and staff augmentation and offshore development centers. The market measures design services revenue and excludes wafer, packaging, and production revenue in turnkey engagements. The market ecosystem extends from electronic design automation (EDA) and IP suppliers to design service providers, foundries and packaging providers, and fabless companies, integrated device manufacturers (IDMs), system companies, and hyperscalers.

Chip design has become more complex and expensive as chips move to advanced process nodes and as more companies design their own silicon. Leading-edge designs at 5nm, 3nm, and 2nm require billions of transistors, complex verification, advanced physical design, and close collaboration with foundries and packaging providers. Many companies lack the in-house resources to design such chips, creating demand for specialized design service providers.

Semiconductor demand is at record levels. According to the Semiconductor Industry Association (SIA), global semiconductor sales increased 25.6% to a record USD 791.7 billion in 2025, with logic sales up 39.9% to USD 301.9 billion and memory sales up 34.8% to USD 223.1 billion. The SIA reported that sales in the Asia Pacific/All Others region increased 45.0% and in the Americas 30.5% in 2025. Higher demand for logic chips, particularly for AI, is increasing the number of chip design projects and the value of design services.

Custom AI silicon is the main driver of growth. Hyperscalers are designing their own AI accelerators, networking chips, and processors to improve performance and reduce costs, and they often work with ASIC partners to design and produce these chips. Broadcom reported record revenue of USD 29.6 billion in the third quarter of fiscal 2026, up 86% year over year, with AI semiconductor revenue of USD 16.7 billion, up 221%, and guided to AI semiconductor revenue of USD 21.7 billion in the fourth quarter, driven by strong demand for its custom AI accelerators and networking. Broadcom has also reaffirmed projections for multi-million-unit AI cluster deployments by three anchor customers in 2027.

Dedicated ASIC design service providers are benefiting from this trend. Alchip Technologies, a leading ASIC design service provider, reported 2025 revenue of USD 992 million, with HPC and AI ASICs accounting for 83% of revenue, North American customers for 78%, and 7nm and 5nm designs for 73%, and expects increased 3nm production programs from Q2 2026. The company described 2025 as a temporary slowdown after revenue of USD 1.6 billion in 2024, due to limited production shipments, and expects a return to long-term growth from 2026. Global Unichip Corp. (GUC), an ASIC design service provider affiliated with TSMC, reported 2025 net sales of NT$34.14 billion, up 36.3%, with December 2025 sales up 75.7% year over year.

Advanced process nodes are increasing the value of design services. Alchip reported that 2nm and 3nm designs accounted for 14% of its 2025 revenue and 7nm and 5nm designs for 73%, reflecting the concentration of AI ASIC designs at leading-edge nodes. Each new node increases design complexity, verification effort, and the need for close collaboration with foundries, making experienced design service providers more valuable.

Chiplet architectures and advanced packaging are adding new design requirements. AI accelerators increasingly combine multiple compute dies, high-bandwidth memory (HBM), and I/O dies in a single package using 2.5D and 3D integration. Designing these systems requires expertise in die-to-die interfaces, interposers, signal and power integrity, and thermal design, creating demand for chiplet and advanced packaging design services.

Governments are supporting chip design capabilities. In India, MeitY approved 23 chip design projects under the DLI scheme in July 2025. The scheme, launched in December 2021 with a total outlay of INR 8.03 billion, supports up to 50% of eligible design costs, capped at INR 150 million per application, and deployment incentives of 4% to 6% of net sales for five years. By July 2025, 278 academic institutions and 72 startups had gained access to EDA tools and IP cores under the program, and 20 chip designs from 17 institutions had been fabricated at the Semi-Conductor Laboratory in Mohali.

India is also a major global center for chip design services, as many semiconductor companies and design service providers operate large design centers in Bengaluru, Hyderabad, Noida, and other cities. Engineering services companies such as HCLTech, L&T Technology Services, Tata Elxsi, Wipro, and eInfochips provide chip design services from India to customers worldwide.

The structure of the market is changing as custom silicon grows. Large custom silicon providers such as Broadcom and Marvell work with hyperscalers on multi-generation AI accelerator and networking programs, dedicated ASIC design service providers such as Alchip, GUC, Faraday, and Socionext offer design-to-production services closely linked to foundries, and engineering services companies such as HCLTech, L&T Technology Services, Tata Elxsi, Wipro, and eInfochips provide design, verification, and validation capacity, often from India. EDA vendors such as Cadence also offer design services to support customers using their tools and IP.

The value of design services per chip is increasing as designs become larger and more complex. An AI accelerator at 3nm or 2nm may combine multiple compute dies, HBM stacks, and I/O dies, each requiring architecture, verification, physical design, DFT, and packaging design, as well as extensive post-silicon validation. As a result, design services spending is expected to grow faster than the number of chip designs over the forecast period.