Although there will be sales growth in both cellphones and personal computing systems, cellular IC sales are forecast to surge past other markets.
Cellphone IC sales are poised to overtake overall IC revenue this year. The forecast from IC Insights is based on the on-going slump in shipments of standard personal computers together with the drop-off in tablet sales.
According to IC Insights, IC sales for cellular phone handsets are projected to grow by 16% in 2017 to $84.4 billion (figure 1), while the IC market for personal computing systems (desktop and notebook PCs, tablets and thin-client Internet-centric units) is forecast to increase by 9% to $80.1 billion this year.
Figure 1: The gap between IC sales for cellphones and total personal computing systems is projected to widen by the end of this decade. (Source: IC Insights)
IC sales for both cellphones and total personal computing systems are strengthening significantly in 2017 primarily because of strong increases in the amount of money being spent on memory, with the average selling price (ASP) of DRAM expected to climb by 53% and NAND flash ASP forecast to rise by 28% this year.
In 2016, IC sales for cellphone handsets grew by 2% after rising by 1% in 2015, while dollar volume for ICs used in personal computing systems increased by just 1% last year after falling 6% in 2015. Cellphone IC sales are also getting a boost from a projected 5% increase in shipments of smartphones, which are being packed with more low-power DRAM and non-volatile flash storage, while growth in personal computing is expected to be held back by 3% declines in both standard personal computer and tablet unit volumes in 2017.
Shrinking PC shipments
Shrinking shipments of desktop and notebook computers enabled cellphone IC sales to surpass IC revenues for standard PCs in 2013. During 2015 and 2016, cellphone IC sales came close to catching up with IC sales for total personal computing systems. In 2017, cellular phone handsets are now forecast to take over as the largest end-use systems category for IC sales. The gap between IC sales for cellphones and total personal computing systems is projected to widen by the end of this decade. Cellphone IC sales are expected to increase by a CAGR average of 5.3% in the 2015-2020 forecast period to $92.1 billion versus personal computing IC revenues rising by CAGR of just 2.9% to $83.8 billion in 2020, according to an update by IC Insights.
The updated forecast shows IC sales for standard PCs climbing 11.2% in 2017 to $67.5 billion after increasing about 4% in 2016 to $60.7 billion. Tablet IC sales are now expected to drop by 2% to $11.8 billion in 2017 after falling 11% in 2016 to $12.1 billion, based on the updated outlook. IC sales for thin-client and Internet/cloud computing centric systems—such as laptops based on Google’s Chromebook platform design—are projected to rise 15% in 2017 to a $838 million after surging 21% in 2016 to $728 million. Between 2015 and 2020, IC sales for standard PCs are expected to grow by a CAGR of 4.1% to $71.6 billion in the final year of the updated outlook, while table integrated circuit revenues are projected to fall by -3.9% annual rate in the period to about $11.0 billion and ICs in Internet/cloud computing are forecast to rise by CAGR of 13.8% to more than $1.1 billion.