Standard PCs will lose status as largest IC app in 2013

USA: For most of the last two decades personal computers have accounted for a third or more of annual IC sales, but standard PCs are now on the brink of being replaced as the largest end-use product category for integrated circuits, according to IC Insights’ new 485-page 2013 edition of IC Market Drivers—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits.

With cellphones and tablet computers racking up stronger growth rates, standard PCs are expected to use just one quarter of the ICs sold in 2012, and that share will fall to slightly less than 20 percent in 2016, based on the forecast in the new report.

Meanwhile, cellular phones are expected to account for 24 percent of the IC industry’s revenues in 2012, and that share is forecast to reach nearly 32 percent in 2016, according to the 2013 IC Market Drivers report. The new report predicts that cellphone IC sales will exceed standard PC IC dollar volumes for the first time in 2013—$70.7 billion versus $65.1 billion for integrated circuits used in standard PCs.

In 2015, cellphone chip sales are forecast to surpass total IC sales for all types of PC systems, including standard PCs, fast-growing tablets, new “convertible” hybrid tablet/notebook computers, and Internet-centric portable products (such as Google’s Chromebook platform) designed for cloud-computing applications.

The 2013 IC Market Drivers report divides the total PC market into five product categories: touch-screen tablets; desktop computers; notebook PCs; “convertible” tablet/notebook systems; and Internet-centric portables.

Total PC system shipments are projected to reach 749 million units in 2016 compared to 418 million in 2011, representing a CAGR of 12.4 percent. In terms of dollar revenues, the total PC market is expected to reach $348 billion in 2016 compared to $268 billion in 2011, which is a CAGR of 5.4 percent in the report’s five-year forecast period.

An analysis in the 2013 IC Market Drivers shows that the IC content value of tablet computers is about half that of standard PCs—meaning that it requires the shipment of two tablets to generate the same IC dollar volume as a single, standard (desktop, notebook) PC.

Desktop PC unit shipments are projected to rise by a CAGR of just 0.1 percent in the forecast period while notebook computers are expected to grow by a CAGR of 7.4 percent between 2011 and 2016, according to the new report’s 80-page personal computing section.

Tablet shipments are forecast to increase by a CAGR of 33.9 percent, while convertible tablet/notebook systems are expected to grow by an average annual rate of 130.5 percent in the 2011-2016 period.

IC Insights believes Internet-centric portables (some of which could be called “thin-client” systems) will remain a small niche in personal computing.  Internet-centric system shipments are expected to decline by CAGR of -4 percent in the forecast period due to shrinking sales of netbooks, which were backed by Intel and briefly took off four years ago before losing momentum to tablets in 2010.