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August 23, 2011


IC Market to Top $300 Billion for First Time in 2013

Mid-Year Update highlights bright spots in IC industry during current economic lethargy

Momentum that carried the IC industry to one of its strongest growth years in history in 2010 has dissipated and the feeling of optimism that was evident at the start of 2011 has been replaced with sentiments of caution, uncertainty, and hesitancy as economic headwinds have put a damper on forecast growth.

In its recently released 2011 Mid-Year Update, IC Insights lowered its forecast for 2011 worldwide semiconductor industry growth from 10% to 5% and lowered its 2011 IC market forecast from 10% to 4%. Yet, despite the less bullish outlook, some positive news has emerged from data within the Mid-Year Update that provides a silver lining amidst all the dour news being reported. Among the highlights are the following items.

  • According to IC Insights’ revised forecast, the IC market will surpass $300 billion for the first time in 2013. As a point of reference, the IC market first topped the $10-billion mark in 1980, first exceeded $100 billion in sales in 1995 and topped $200 billion for the first time in 2005 (Figure 1). As shown, it took 15 years for the IC market to grow from $10 billion to $100 billion, 10 years to double in size to $200 billion, and is forecast to take eight years to increase another $100 billion to reach the $300-billion plateau.

Figure 1

  • Total IC unit shipments are forecast to top the 200-billion mark for the first time in 2011. Shipments of analog devices are forecast to surpass 100 billion units in 2011–the first time any product segment has reached that level–and represent 50% of total IC unit shipments.

  • MOS memory devices are forecast to have the strongest market CAGR among the major product categories during the 2008-2015 timeperiod, with average annual growth of 12%. Over the same period, NAND flash memory is forecast to be among the strongest-growing individual product segments with 20% average annual growth. Rising demand for tablet PCs, smartphones, and solid-state drives will drive increasing sales of NAND flash through 2015.

  • Total smartphone shipments are forecast to grow 60% in 2011 to 440 million units, after increasing 56% to 275 million in 2010. Between 1Q10 and 4Q11, quarterly smartphone shipments are expected to rise by an average of 13% per quarter. This is significant because smartphones contain as much as 9x more NAND flash than a basic or enhanced cellphone.

  • Market momentum for automotive-related ICs continues with the Automotive Application-Specific Analog market forecast to grow 32% in 2011–highest among all IC products. Strong growth is also forecast this year for the Automotive Special Purpose Logic/MPR segment and in the market for 32-bit MCUs. Sophisticated safety systems, driver information systems, and engine control units will keep the automotive IC market active through 2015.

  • The steep takeoff of touch-screen tablets has turned the portable-computer segment upside down, with microprocessor giant Intel and rival Advanced Micro Devices scrambling to head off the overwhelming success of ARM-based processors in tablets. ARM processors were used in well over 90% of the 17 million tablets sold by all systems suppliers in 2010, and nearly that same share is expected in 2011. The spread of ARM-based processors threatens to go beyond tablet computers and invade the x86 MPU turf in mainstream home PCs, desktop systems, and even network servers.

Report Source

Mid-Year (June/July) Update to The McClean Report 2011.

The 250-page Mid-Year Update to The McClean Report is a part of IC Insights’ new 2011 “Half-Year” McClean Report service. The 2011 Half-Year McClean Report subscription includes the Mid-Year Update, the August, September, October, and November Monthly Updates, as well as access to The McClean Report subscriber-only Webcasts in August and November. The new 2011 Half-Year McClean Report subscription is priced at only $1,990 for a single user and $3,290 for a multi-user corporate license.

Note: Current 2011 McClean Report subscribers will receive all of the products/services described above as part of their full-year subscription.

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