Company: AIP
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001667011-25-000010
Chunk: 9

Company: Arteris, Inc.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 1
Chunk 9
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 an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term, of $60.7 million. ACV plus royalties reached $65.1 million as of December 31, 2024. In 2024, we added 10 net new Active Customers. We define Active Customers as customers who have entered into a license agreement with us that remains in effect. 

Industry Background

The semiconductor industry is characterized by rapid technological change and increasing levels of integration. The semiconductor industry moved from integrated circuits that process data to SoCs that make decisions, and now extends to systems. SoCs grew more complex, enabling applications such as automated driving and enterprise computing data center acceleration. Integration of processors, accelerators, machine learning subsystems, sophisticated multi-channel memories, and an ever-larger number of interface standards has increased the need to move data efficiently inside the SoC and between SoC chiplets.

Increasing chip design complexity leads to rising costs. The move to more advanced process nodes has led to significantly more expensive and complex chip design methods and manufacturing processes.

Increasing SoC complexity leads to increasing System IP value while also placing pressure on IP block assembly and connectivity efforts. As SoCs grow in size, partly due to machine learning subsystems, communication complexity increases. The increasing use of cache coherent and non-coherent traffic in a single SoC may amplify demand for our System IP solutions. Increased SoC complexity also requires SoC teams to manage potentially hundreds of IP blocks from various vendors and internal development groups. These teams and their electronic design software (EDA) groups must implement IP supply chains with increasingly capable SoC integration automation to succeed, supported by standards like IEEE 1685 IP-XACT. As these standards become increasingly sophisticated with each generation, more sophisticated software is required to support them.

Rising demand from emerging end markets and new market participants is increasing the need for System IP solutions. New applications in markets such as automotive, enterprise computing, communications, consumer electronics, and industrial have increased the diversity and overall demand in the semiconductor market. These new applications, which often include more AI/ML technology, safety, or complex hardware-software integrations, have led to an increase in the number and complexity of SoC designs. Chips used for artificial intelligence (AI) training and inference acceleration have increased in size, with added design complexities and performance requirements, leading to higher design costs. 

There is a shift to third-party IP due to cost benefits, product differentiation, and accelerated time to market. Developing state