Microwave Journal

Standalone vs. integrated dilemma is major theme of $37B mobile handset semiconductor market

May 25, 2012

Revenues for core semiconductor components used in mobile handsets, including platform ICs and wireless connectivity ICs, are expected to reach almost $37 billion per annum in 2012. The market has seen strong growth from 2009 as the smartphone market has increased significantly, driving growth for many components, including applications processors and Wi-Fi ICs.

“The smartphone has offered many opportunities to semiconductor vendors as it has largely been dominated by standalone IC solutions,” comments practice director Peter Cooney. “However, the market is transitioning to one of more integrated solutions, particularly in the high growth, low- and mid-end tiers of the market. This will mean less available sockets and therefore much stronger competition for these in the future.”

Qualcomm dominates the overall market with over one-quarter of total market revenues in 2011. It is also the best-placed company to take advantage of the growing integrated solutions market, as demonstrated by the success of its Snapdragon portfolio of products.  There are many other suppliers, such as Broadcom and ST-Ericsson, who are racing to compete in this section of the market, e.g. ST-Ericsson’s NovaThor and its recent success with a number of handsets suppliers, including Samsung.

“Based on current market conditions and product portfolios, it seems Qualcomm is the clear favorite to continue its dominance of the handset IC market. I’d expect that Qualcomm will increase its market share of the overall platform IC market over the next five years,” says Cooney. “This doesn’t mean it will be a closed shop, however, and there is certainly room for two or three other suppliers to have a long-term position in the market. Currently there are a number of contenders that have an eye on second or third place, including Broadcom, Intel, ST-Ericsson, NVIDIA, MediaTek, and Marvell.”

The overall market for handset ICs is forecast to peak in 2014, reaching almost $40 billion. It is then expected to fall, as handset shipment growth starts to stall and IC average selling prices continue to fall. Expect even more fierce competition for sockets in the future.

ABI Research’s new study, “Mobile Device Semiconductors Market Data, Global Summary,” provides analysis of the major semiconductor components used in mobile handsets.

It is part of the Mobile Device Semiconductors Research Service.