Communications IC market forecast to exceed computer IC market for first time in history in 2013

USA: Surging smartphone shipments coupled with sluggish notebook computer sales are forecast to propel the total communications IC market past the total computer IC market for the first time in history this year, according to the recently released Update to IC Insights’ IC Market Drivers 2013—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits.

Fig. 1 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).  As shown, the communications IC market is forecast to register a strong 2009-2013 CAGR of 16 percent as compared to only a 3 percent 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 percent, much better than the 4 percent 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 percent in 2012, the wireless communications DRAM market increased by 14 percent last year. Driven by strong sales of smartphones, cellphone DRAM bit usage significantly jumped in 2012. Moreover, with DRAM ASPs firming, the wireless DRAM market is forecast to surge 25 percent 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 percent of the wireless communications flash memory usage is estimated to be for cellphones (primarily smartphones). In 2013, the wireless communications flash market (mostly NAND flash) is expected to rebound with a 20 percent increase after registering only 1 percent growth in 2012.

Besides the small wireless SRAM market, the fastest growing wireless communications IC market in 2012 was the MPU segment, which includes cellphone application processors. With strong growth in the smartphone portion of the cellphone 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 percent 2009-2013 CAGR expected for the communications IC segment, it was only about one-fifth the size of the communications IC market last year. In contrast to the fast-growing communications and automotive IC end-use markets, the consumer IC market is forecast to be 5 percent less in 2013 ($33.3 billion) than it was in 2009 ($35.2 billion).