Semicon mkt to grow more than $170 bn in 5 yrs

LONDON, UK: In 2011, the mobile handset semiconductors segment that includes processors, RF, power management and wireless connectivity witnessed a growth of more than $30 billion. Almost 60 per cent of total revenues in 2011, is the result of the recent growth of the smartphone market.

Over the last five years, the worldwide market has generated revenue of more than $120 billion and it is estimated that it will generate more than $170 billion during the next five years. Advanced modems, applications processors and wireless connectivity ICs are seen as the primary growth drivers for 2011.

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

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.

Explaining this situation, Cooney says, ''The applications processor market will continue to see significant growth for the next few years. 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.''