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© ic insights Analysis | December 11, 2017

Automotive and IoT Will Drive IC Growth Through 2021

Integrated circuit sales for automotive systems and the Internet of Things are forecast to grow 70 percent faster than total IC revenues between 2016 and 2021, according to IC Insights’ new 2018 Integrated Circuit Market Drivers Report.
ICs used in automobiles and other vehicles are forecast to generate worldwide sales of USD 42.9 billion in 2021 compared to USD 22.9 billion in 2016, while integrated circuit revenues for Internet of Things (IoT) functionality in a wide range of systems, sensors, and objects are expected to reach USD 34.2 billion in four years compared to USD 18.4 billion last year.

Between 2016 and 2021, automotive and IoT IC sales are projected to rise by compound annual growth rates (CAGRs) of 13.4 percent and 13.2 percent, respectively, compared to 7.9 percent for the entire IC market, which is projected to reach USD 434.5 billion in four years versus USD 297.7 billion last year. Strong five-year IC sales growth rates are also expected in medical electronics (a CAGR of 9.7 percent to USD 7.8 billion in 2021) and wearable systems (a CAGR of 9.0 percent to USD 4.9 billion).

Cellphone IC sales—the biggest end-use market application for integrated circuits, accounting for about 25 percent of the IC market’s total revenues—are expected to grow by a CAGR of 7.8 percent in the 2016-2021 period, reaching USD 105.6 billion in the final year of the new report’s forecast. Meanwhile, weak and negative IC sales growth rates are expected to continue in video game consoles (a CAGR of -1.9 percent to USD 9.7 billion in 2021) and tablet computers (a CAGR of -2.3 percent to USD 10.7 billion).

Sharply higher average selling prices (ASPs) for DRAMs and NAND flash are playing a significant role in driving up dollar-sales volumes for ICs in cellphones and PCs (both desktop and notebook computers) in 2017. Cellphone IC sales are on pace to surge 24 percent this year to an estimated USD 89.7 billion, while PC integrated circuit dollar volume is expected to climb 17.6 percent to USD 69.0 billion. For both the cellphone and PC market segments, 2017 will be the strongest increase in IC sales since the 2010 recovery year from the 2009 downturn. The 2018 IC Market Drivers report’s forecast shows cellphone integrated circuit sales rising 8 percent to USD 97.3 billion next year and PC IC revenues growing 5 percent to USD 72.6 billion in 2018.

The new report estimates that automotive IC sales will rise 22 percent in 2017 to about USD 28.0 billion after increasing 11 percent in 2016. Automotive IC sales are forecast to increase 16 percent in 2018 to USD 32.4 billion. Meanwhile, IoT-related integrated circuit sales are on pace to grow 14 percent in 2017 to an estimated USD 14.5 billion after increasing about 18 percent in 2016. In 2018, integrated circuit sales for Internet of Things end-use applications are expected to rise 16 percent to about USD 16.8 billion.

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October 15 2018 11:56 pm V11.6.0-1