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Qualcomm will lead smartphone and tablet growth to $37bn by 2018

Thanks to 4G and 64-bit chips, analysts claim
Tue Apr 08 2014, 11:52
Qualcomm Snapdragon

THE SMARTPHONE CHIP MARKET is expected to grow by over 10 percent in the next five years, pushed by the success of 4G LTE and 64-bit technologies to reach $30bn revenue, analyst firm Strategy Analytics has claimed.

In a forecast report, Strategy Analytics senior analyst Sravan Kundojjala said the global smartphone processor market will register a "healthy" 10.8 percent increase in revenues from 2013 to 2018 to reach $30bn, saying that growth will be driven by LTE Advanced, 64-bit and multi-core processors, and advances in semiconductor process technologies.

The analyst outfit also predicted that standalone processor penetration in smartphones will drop to 28 percent in 2018 from 38 percent in 2012.

"This can be attributed to an increased push from integrated vendors such as Qualcomm, Mediatek, Spreadtrum, Broadcom and Marvell," the firm said in its report summary, adding that multi-core penetration in smartphone applications processors is forecast to rise from 50 percent in 2012 to almost 100 percent in 2018.

"The 64-bit chip penetration in smartphone processors will rise from three percent in 2013 to approximately 75 percent in 2018. Apple, Intel, Qualcomm and Samsung among others will drive this growth," Kundojjala said. "[We] believe that 64-bit chip adoption will be somewhat slower than multi-core chip adoption in smartphones as the required software ecosystem transition is likely to take time."

Strategy Analytics' report also predicts that ARM based chip penetration in smartphones will drop to 83 percent in 2018 from almost 100 percent in 2012.

"This can be attributed to concerted efforts by Intel in smartphones combined with the company's lead in 14nm and beyond process technologies," said Strategy Analytics director of the handset component technologies service Stuart Robinson. "[We] believe that upcoming 3G/4G integrated products from Intel could lift the company's smartphone applications processor share in the near-term."

The analyst firm also expects the global tablet chip market to register revenue growth of 14.6 percent during the same timeframe of 2013 to 2018, but reaching a lower amount of around $7.2bn in 2018. This will be thanks to low-cost quad-core 3G/4G chips from chip vendors such as Qualcomm, Mediatek and Spreadtrum, the firm predicted.

"We forecast a modest average selling price (ASP) growth [of tablets] through 2018, despite the introduction of 64-bit chips. In addition, a high concentration of low-cost tablet chip vendors in this market will result in a price war which is expected to have a significant impact on ASPs," Kundojjala said.

If Strategy Analytics' forecasts are correct, x86 chip penetration in tablets will also increase to 30 percent in 2018 from 10 percent in 2012, with Intel's investments in Android resulting in future share gains.

Last week, Gartner claimed that global semiconductor revenue grew by five percent in 2013, with Micron Technology leading the top 10 chip vendors.

At $315bn in 2013, worldwide semiconductor revenue was up five per cent from 2012, Gartner said, with Micron Technology accounting for $1.19bn last year, up 72 percent from the previous year.

Gartner said that Micron's impressive growth was attributable to its acquisition of Elpida Memory, which the analyst firm counted under Micron from the third quarter of 2013 onward. µ


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