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Smartphones, tablets push process market in 2013

Posted: 28 Nov 2013 ?? ?Print Version ?Bookmark and Share

Keywords:IHS? smartphone? tablet? processor? Intel?

IHS has released a forecast stating that the global market for processor microchips will increase by 24 percent in 2013, driven by the strong sales growth of smartphones and tablets. Worldwide processor shipments are forecast to reach 1.50 billion units by the end of this year, up from 1.21 billion in 2012. Although Q3 numbers have yet to be finalized and Q4 figures reflect best estimates at this point, each quarter this year is expected to have enjoyed a significant rise in volume compared to the same periods in 2012, added the market analytics firm.

The first half of the year, in particular, yielded solid growth, up 27 percent in Q1 on an annual basis, and up 24 percent in Q2. Meanwhile, expansion in Q3 is anticipated at 19 percent, while growth in Q4 is forecast to come in at 24 percent.

Processor microchips serve as the logic unit or the brains of a system, handling digital input according to the instructions stored in the chip's memory.

The processors being counted include the traditional chips implanted at the heart of machines such as desktop PCs and servers, as well as mobile counterparts used in notebook computers, smartphones and tablets. Mobile versions, in turn, include standalone application processors as well as SoCs that combine a baseband processor together with the application processor.

"The overall processor market would not be so healthy if it weren't for smartphones and tablets," said Gerry Xu, senior analyst, processor research for IHS. "The PC market that traditionally drove the growth of the microprocessor segment has slowed. The new mobile platforms have more than picked up the slack, delivering both large volumes and fast growth for processor shipments."

Processor shipments to tablets are particularly vigorous, up from 38.3 million units in 2Q12 to 53.5 million for the same period this year, equivalent to growth of 40 percent. Growth in processor shipments to smartphones was only slightly less impressive, up 38 percent from 147.9 million to 204.2 million.

In tablets, the rise of low-cost devices made in China boosted shipments for Chinese processor vendors such as Allwinner and Rockchip. The vendors played significant roles not only in the undifferentiated white-box tablet market but also in top-tier levels as they sold to major brands such as HP and Lenovo.

In smartphones, the performance of the processor remains a key feature and the competition among brands is fierce. In H1, for instance, a series of flagship smartphones such as the HTC One and the Samsung Galaxy S4 were released, including high-level implementations for standalone application processors.

Of the four major segments in which processors are used, the PC category was the lone area in which chip shipments every quarter so far this year were generally down from the same periods in 2012. In Q2, for instance, processor shipments for PCs amounted to 84.3 million units, down from 89.9 million a year ago at the same time.

The decline is not surprising, as PCs have struggled to compete against more popular devices such as mobile handsets and tablets. Sluggish PC sales, in turn, have affected processors being shipped to the space.

Within the PC segment, processor shipments to notebook computers were down two percent on the year, while shipments to desktop PCs were down a much larger 13 percent. In the higher-performance sector for servers, processor shipments fared better in growth, with every quarter so far this year posting an increase. Shipments in Q2, for instance, rose to 4.8 million units, up from 4.6 million YoY.

Intel rival Advanced Micro Devices Inc. (AMD) increased its market share in processor shipments to PCs during Q2 compared to the first, even though its share of market overall fell on an annual basis. Intel remained the dominant force in PC processors, now at 84 percent market share overall.

Intel is placing high hopes on its latest Atom processor to drive the company's future. Atom will be used in PCs, servers, tablets and smartphones—virtually all key segments of the processor market. With the latest Atom, the giant chipmaker is focusing on power efficiency as well as improved computing performance.





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