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Components | April 19, 2012

Smartphones will drive device semi market

Smartphones will drive device semiconductor market to USD 170 billion cumulative revenues in next five years.
​Mobile handset semiconductors, including processors, RF, power management, and wireless connectivity, grew to more than $30 billion in 2011. The worldwide market generated more than $120 billion in revenue over the last five years and will generate more than $170 billion during the next five years.

Recent growth spurred by the burgeoning smartphone market has accounted for almost 60% of total revenues in 2011. Revenue growth has been led by more advanced modems, applications processors, and wireless connectivity ICs.

“The smartphone market to date has largely been focused on producing high-end devices,” says Peter Cooney, practice director, semiconductors. “OEMs have demanded increasingly powerful processors to help differentiate their products in a crowded market, leading to an arms race among applications processor vendors.”

Applications processor shipments will continue to grow year-on-year through 2016, however, slowing handset shipments, falling average selling prices for ICs, and increased integration will force total revenues to peak in 2014 before beginning a gradual decline.

“The applications processor market will continue to see significant growth for the next few years,” adds Cooney. “But it will become increasingly competitive and once revenues start to decline after 2014 it will leave one or two vendors thinking twice about their place in the market.”

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