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Communications IC to leapfrog PC IC market

Posted: 13 Jun 2013 ?? ?Print Version ?Bookmark and Share

Keywords:communications IC? PC chips? market drivers?

The updated IC Insights' "IC Market Drivers 2013A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits" report sees the continuing growth of smartphone shipments is driving the communications IC market to overtake the computer IC market. This will be the first time that the communication chip market will lead against PC chips. The computer IC sales are struggling to survive the market.

The table below shows that the communications IC market is forecast to reach $99.4 billion in 2013, $1.4 billion higher than the $98 billion level expected for the computer IC market. It should be noted that the forecasts in the 2013 IC Market Drivers report extend to 2016.

IC usage

Total IC usage by system type (2009-2013, $M)
Source: IC Insights' 2013 IC Market Drivers Update, Part I

As shown, the communications IC market is forecast to register a strong 2009-2013 CAGR of 16 per cent as compared to only a 3 per cent CAGR for the computer IC market over this same timeframe.

The total communications IC market is composed of ICs sold to manufacturers of both "wireless" and "wired" electronic systems. In 2012, the total wireless communications IC market increased 3 per cent, much better than the 4 per cent decline for the total IC market. Although the wired communications IC market reached $18.2 billion in 2012 and outgrew the wireless communications IC market by three percentage points, this segment was only about one-fourth the size of the $70.1 billion 2012 wireless communications IC market.

Although the total DRAM market declined by 11 per cent in 2012, the wireless communications DRAM market increased by 14 per cent last year. Driven by strong sales of smartphones, cell phone DRAM bit usage significantly jumped in 2012. Moreover, with DRAM ASPs firming, the wireless DRAM market is forecast to surge 25 per cent this year.

While the wireless DRAM market is showing strong growth, flash is still the most prevalent memory type used in communications systems. Moreover, 90 per cent of the wireless communications flash memory usage is estimated to be for cell phones (primarily smartphones). In 2013, the wireless communications flash market (mostly NAND flash) is expected to rebound with a 20 per cent increase after registering only 1 per cent growth in 2012.

Besides the small wireless SRAM market, the fastest growing wireless communications IC market in 2012 was the MPU segment, which includes cell phone application processors. With strong growth in the smartphone portion of the cell phone market, booming sales of stand-alone application processors from companies such as Qualcomm and Broadcom are expected to drive the wireless MPU communications IC market to $16.8 billion in 2013, more than triple its size in 2009.

It is interesting to note that although the automotive IC market is forecast to show the same strong 16 per cent 2009-2013 CAGR expected for the communications IC segment, it was only about one-fifth the size of the communications IC market last year, according to IC Insights. In contrast to the fast-growing communications and automotive IC end-use markets, the consumer IC market is forecast to be 5 per cent less in 2013 ($33.3 billion) than it was in 2009 ($35.2 billion).

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