Processor market driven by tablet growth

The global market for processor microchips is set to rise by a hefty 24 per cent in 2013, propelled by the strong sales growth of smartphones and tablets, according to a report from IHS.

Worldwide processor shipments are forecast to reach 1.50 billion units by the end of this year, up from 1.21 billion in 2012. Although third-quarter numbers have yet to be finalised and fourth-quarter figures reflect best estimates at this point, each quarter this year is expected to have enjoyed a significant rise in volume compared to the same periods in 2012.

The first half of the year, in particular, yielded solid growth, up 27 per cent in the first quarter on an annual basis, and up 24 per cent in the second quarter. Meanwhile, expansion in the third quarter is anticipated at 19 per cent, while growth in the fourth-quarter is forecast to come in at 24 per cent, as shown in the attached figure.

Processor microchips serve as the logic unit or the brains of a system, handling digital input according to the instructions stored in the chip’s memory.

The processors being counted include the traditional chips implanted at the heart of machines like desktop PCs and servers, as well as mobile counterparts used in notebook computers, smartphones and tablets. Mobile versions, in turn, include standalone application processors as well as Systems-on-Chips that combine a baseband processor together with the application processor.

“The overall processor market would not be so healthy if it weren’t for smartphones and tablets,” said Gerry Xu, senior analyst, processor research for IHS. “The PC market that traditionally drove the growth of the microprocessor segment has slowed. The new mobile platforms have more than picked up the slack, delivering both large volumes and fast growth for processor shipments.”

Processor shipments to tablets are particularly vigorous, up from 38.3 million units in the second quarter of 2012 to 53.5 million for the same period this year, equivalent to growth of 40 per cent. Growth in processor shipments to smartphones was only slightly less impressive, up 38 per cent from 147.9 million to 204.2 million.

In tablets, the rise of low-cost devices made in China boosted shipments for Chinese processor vendors such as Allwinner and Rockchip. The vendors played significant roles not only in the undifferentiated white-box tablet market but also in top-tier levels as they sold to major brands like Hewlett-Packard and Lenovo.

In smartphones, the performance of the processor remains a key feature and the competition among brands is fierce. In the first half, for instance, a series of flagship smartphones like the HTC One and the Samsung Galaxy S4 were released, including high-level implementations for standalone application processors.

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