The increasing value of the average IC content in cellular handsets along with the increasing percentage of smartphones sold as a per cent of total cellular handsets will drive the cellphone IC market to $94.3 billion in 2019, according to IC Insights.

Strong double-digit growth rates in the cellular handset IC market were logged in 2013 and 2014 but only a 2% increase was registered in 2015. Despite the expected increase of 4% in 2016, the 2015-2019 total cellphone IC market CAGR is forecast to be 6.7%, three points higher than the 3.7% CAGR forecast for the total IC market during this same time. The $94.3 billion 2019 cellphone IC market is forecast to be about 30% higher than the level registered in 2015.

cellphone 01 Figure 1: (Source: IC Insights)

In 2015, the IC product segment that had the highest average content per cellphone was the MPU category ($9.92), which includes the application processors used in smartphones. The second highest was the application specific logic segment, which had an average $8.55 of IC content per cellular handset. In total, there was an average of $38.78 worth of ICs in a 2015 cellular handset.

DRAM memory held 59% ($12.3 billion) of the total cellphone memory market in 2015, with NAND flash representing most of the remainder of the market. The $21 billion cellphone memory market in 2015 was driven by the surge in shipments of memory-rich high-end smartphones and the 6% increase in the cellphone DRAM market.

The average analogue content in a cellphone increased in 2015 to $6.64 while the total cellphone analogue IC market increased by 8%, six points better than the 2% growth rate experienced by the total 2015 analogue IC market. Application specific analogue, mostly comprised of mixed-signal devices, represented about 83% of the total $12.5 billion 2015 cellular handset analogue IC market.

In 2019, as the market shifts more towards low-end smartphones, the cellphone MPU market is expected to represent 23% of the total cellphone IC market, down two points from 26% in 2015. Moreover, the cellphone DRAM memory market in 2019 is forecast to reach $19.9 billion and be more than two times larger than the total flash cellphone IC market ($9.5 billion) in that year. In contrast to the high-growth cellphone DRAM market, the 2019 cellphone DSP market is forecast to be less than $0.1 billion, down from $1.3 billion in 2012.