Don't overestimate tablet impact on semiconductor market, smartphones are another story!

NEW TRIPOLI, USA: The Information Network has put out: Don't overestimate tablet impact on semiconductor market, smartphones are another story!

Fiction: The boom in tablets and smartphones will generate considerable growth in semiconductor sales and therefore equipment sales for capacity expansion in 2011.

Fact 1: We forecast that tablet sales are expected to grow from 17 million units in 2010 to 54 million in 2011.

But: Tablets are essentially taking sales away from netbooks (market is practically dead) and notebooks. Impacted are HDDs (tablets use SSDs) and LCDs (smaller screens)

Fact 2: We forecast that smartphone sales are expected to grow from 279 million units in 2010 to 366 million units in 2011, a growth of 31 percent.

But: Smartphones are essentially taking sales away from regular cell phones. Regular cell phones will grow from 1.07 billion units in 2010 to 1.10 billion units in 2011. Impacted favorably by smartphones is the IC content. IC content is $30 for a regular cell phone and $120 for a smartphone.

That means that the IC sales for smartphones will grow from $33 billion in 2010 to $44 billion in 2011 whereas IC sales for cell phones will grow from $21 billion in 2010 to $22 billion in 2011.

And: The global market for all ICs is expected to reach $303 billion. ICs for all handsets will be $66 billion, more than 20 percent of the global market.

Bottom line: Tablets are the hype du jour, but smartphones (and all handsets) are the main event.