Cellphones continue to be largest driver of IC sales

USA: The total production value of electronic systems is projected to increase 5 percent in 2014 to $1.49 trillion and climb to about $1.82 trillion in 2018, which represents a CAGR of 5.2 percent from $1.41 trillion in 2013, according to IC Insights’ new 2015 edition of IC Market Drivers—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits.

The new 480-page report shows cellphones extending their lead over standard personal computers (desktops and notebooks) as the largest electronic systems market in 2014 after overtaking PCs for the first time in 2013.

The report also shows the cellphone market extending its lead as the largest end-use IC application in 2014, accounting for 25 percent of total integrated circuit sales in 2014 versus standard PCs representing 21 percent.

Fig. 1 compares the relative market sizes and projected growth rates of 10 major systems segments among a couple dozen end-use electronic product categories covered in the 2015 IC Market Drivers report. Systems sales associated with the emerging Internet of Things are expected to rise by the fastest rate in the forecast period, growing by a CAGR of 21.1 percent.

In 2014, cellphone handsets are expected to account for 18 percent of worldwide electronic systems sales ($265.2 billion) versus standard PCs being 13 percent ($196 billion) of the total this year. In 2013, PCs represented 15 percent of worldwide systems sales while cellphones were slightly less than 18 percent of the total, based on the new report’s market analysis.

Tablet sales are expected to account for 6 percent of 2014 systems revenues compared to 5 percent in 2013, while dollar volumes for Internet of Things functions (embedded in end-use applications) are projected to represent 3 percent of the total electronics market, up slightly from 2013.

After dominating integrated circuit sales for most of the last two decades, standard PCs were unseated by cellphones as the largest end-use IC application in 2013. The new 2015 IC Market Drivers report estimates cellphone integrated circuit sales will grow 11 percent in 2014 to $70.7 billion from $63.5 billion in 2013.

Cellphone IC sales are forecast to rise another 11 percent to $78.4 billion in 2015. Standard PC IC sales will pull out of a two-year slump (-11 percent in 2012 and -10 percent in 2013) to grow 4 percent in 2014, reaching $59.1 billion, according to the new report. PC IC sales are forecast to grow 2 percent in 2015 to $60.6 billion.

Among these 11 end-use market segments, IC sales growth is expected to be the strongest in subsystems for the Internet of Things (a CAGR of 22.3 percent), wireless networks (19.7 percent), and tablet computers (17.4 percent) in the five-year forecast period of the 2015 IC Market Drivers report.

IC revenues generated by these 11 end-use systems categories represented 76 percent of total integrated circuit sales worldwide in 2014 and are expected to account for 85 percent in 2018.