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February 12, 2013

10 IC Product Segments to Exceed Total IC Market Growth in 2013

Tablet and cellphone processors, NAND flash, and telecom-specific ICs to enjoy best growth.

IC Insights’ 2013 McClean Report identifies and segments the total IC market into 34 major IC product categories. The complete list of all 34 major IC product categories ranked by forecast growth rate for 2013 is shown in Figure 1. Ten product categories, led by Tablet MPUs and Cellphone Application MPUs, are forecast to exceed the 6% growth rate forecast for the total IC market this year.  Five categories are forecast to enjoy double-digit growth.  The number of categories with positive growth is expected to more than double to 22 in 2013 from 10 in 2012.

Consumer-driven mobile media devices, particularly smartphones and tablet computers, are forecast to keep the Tablet MPU (50%) and Cellphone Application MPU (28%) segments at the top of the growth list for the third consecutive year.  Other IC categories that support mobile systems—including NAND flash (12%) and special-purpose logic devices—are expected to enjoy better-than-industry-average growth in 2013, as well.

Due to increasing demand for higher levels of precision in embedded-processing systems and the growth in connectivity using the Internet, the market for 32-bit MCUs is also forecast to outpace total IC market growth in 2013. Embedded applications in medical/health systems and smartcards have helped boost the 32-bit MCU market. In the automotive world, demand for 32-bit MCUs is being driven by “intelligent” car systems such as driver information systems and semi-autonomous driving features such as self-parking, advanced cruise controls, and collision-avoidance systems.  In the next few years, complex 32-bit MCUs are expected to account for over 25% of the processing power in vehicles.

After back-to-back years of steep declines in 2011 and 2012, the DRAM market is forecast to increase 9% in 2013, three points more than the total IC market.  DRAM unit growth is expected to increase only 2 percent, but the overall average selling price is forecast to jump 7% this year.  In five of the past six years (2007-2012) the DRAM market declined, which took its toll on weaker suppliers.  Fewer suppliers in the marketplace mean fewer competitors trying to undercut each other’s prices in order to gain marketshare and enhances the likelihood of a more stable pricing environment in the coming year.

Interestingly, in a world that is increasingly wireless, two IC categories of “wired” telecom ICs are forecast to grow faster than the total IC market.  Wired Telecom—Special Purpose Logic/MPR and Wired Telecom—Application-Specific Analog are forecast to grow by 13% and 11%, respectively.

Figure 1

Telecom companies and network operators have been upgrading their long-haul and metropolitan-wide communications systems, which require many high-speed transmission ICs and other circuits.  New 100Gb/s technology has been ready for deployment since 2009 and is being deployed now.  Next-generation transmission technology and ICs for 1 trillion bits per second (“Terabit”) networks are in development.

Telecom and network operators say data traffic is increasing more than 50% per year due to growing use of the Internet and video transmissions.  All wireless traffic eventually goes through high-speed cable transmission “backbone” networks—communications are routed over long distance via optical cable before getting to the cellular network on the other end.  All the mobile Internet, data, and video traffic has to go through a cable network and that is driving up the market for Wired Telecom—Special-Purpose Logic/MPR and Wired Telecom—Application-Specific Analog.  To a lesser degree, the Wired Telecom segments are growing on account of developing country markets where the use of landline phones is increasing.

Report Details:  The 2013 McClean Report

Additional details on IC product markets are included in the 2013 edition of IC Insights’ flagship report, The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry, which features more than 400 tables and graphs in the main report alone.  A subscription to The McClean Report includes free monthly updates from March through November (including a 250+ page Mid-Year Report), and free access to subscriber-only webinars throughout the year.  An individual-user subscription to the 2013 edition of The McClean Report is priced at $3,390 and includes an Internet access password.  A multi-user worldwide corporate license is available for $6,390.

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