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When a team of engineers is tasked with designing a complex integrated
circuit, rather then reinventing the wheel, they may decide to
purchase the plans for one or more functional blocks that have already
been created by someone else. the plans for these functional blocks
are known as intellectual property or IP.
read book on fpga(available on edaboard) by "clive max maxfield"
An IP core is nothing but a piece of ready to use hardware design available from companies which you can plug it in your design. It is also pre-verified for its functionality so less the labour of development and testing. Some examples can be ethernet cores, multiplier cores, usb cores, dsp cores etc.
IP's are very nice to insert in your larger design to do your circuit around the IP but the main problem is understanding the interfaces and verification. Sometimes a company may opt to purchase an IP for quick to market incentive but the effort to build around the soft or hard core is humongous and the man hours required in the end may not be worth the purchase. There are plenty of examples for design shops that suffered a lot after purchasing the core and thought it would have been better to do a modest design themselves instead of paying for the entire set of services that the IP encompasses such as PCI and USB cores.
Finally there is always a wary user who thinks whether IP was verified thoroughly before buying it, that is, the IP has to be used before reuse. That's how they say it.
IP core is basically any design, which can be reused in other designs. Companies develop IP cores and sell them to other companies or parties, which use that in their product.
It is same as in VHDL we use the components already designed by somebody else and available in library. Or we design components and keep them in library for future use. Similarly IP cores are used to make bigger and more complex products.
Companies developing IP cores can sell the same IP core to multiple companies.
A bit of background info on the therm 'IP core'...
The therm 'IP core' come from 'Intellectual Property core'. This origin to the fact that whan a company design a project, or any idea, this project or idea is the intellectual property of that company. For example, when entering into software or high-tech company, you usually sign an agreement, at hireing, of non-disclosure of intellectual property, and that the stuff created there is the intellectual property of the company, and not the author...
When it come to FPGA however, some company specialize in creating ready-to-use cores. And they are actually selling license to those intellectual properties (which can include source code of the core, restrictions on the use of the core, ...).
So, that's why those are called IP cores. It's a bit like a software company that would, for example, specialize in creating game engines, and sell the engine to other company (like the Half-Life engine...). In the industry, for FPGA, we simply came to adopt this 'IP core' term
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