The ongoing slump in shipments of standard personal computers along with the drop-off in tablets are setting the stage for cellphone IC sales to finally surpass integrated circuit revenues in total personal computing systems this year, based on new forecasts in the recently released update of IC Insights’ 2017 IC Market Drivers Report.
IC sales for cellular phone handsets are projected to grow 16 percent in 2017 to $84.4 billion, while the integrated circuit market for personal computing systems (desktop and notebook PCs, tablets and thin-client Internet-centric units) is now forecast to increase nine percent to $80.1 billion this year, according to the 150-page update to the 590-page report, originally released in 4Q16.
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 53 percent and NAND flash ASP forecast to rise 28 percent this year. In 2016, IC sales for cellphone handsets grew two percent after rising one percent in 2015, while dollar volume for integrated circuits used in personal computing systems increased just one percent last year after falling six percent in 2015. Cellphone IC sales are also getting a lift from a projected five percent increase in shipments of smartphones, which are being packed with more low-power DRAM and nonvolatile flash storage, while growth in personal computing is expected to be held back by three percent declines in both standard personal computer and tablet unit volumes in 2017.
Shrinking shipments of desktop and notebook computers enabled cellphone IC sales to surpass integrated circuit revenues for standard PCs in 2013. During 2015 and 2016, cellphone IC sales came close to catching up with integrated circuit 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 integrated circuit sales are expected to increase by a compound annual growth average (CAGR) of 5.3 percent in the 2015-2020 forecast period to $92.1 billion versus personal computing IC revenues rising by CAGR of just 2.9 percent to $83.8 billion in 2020, says the update of IC Insights’ 2017 IC Market Drivers Report.
The refreshed forecast shows IC sales for standard PCs climbing 11.2 percent in 2017 to $67.5 billion after increasing about four percent in 2016 to $60.7 billion. Tablet IC sales are now expected to drop two percent to $11.8 billion in 2017 after falling 11 percent 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 percent in 2017 to a $838 million after surging 21 percent in 2016 to $728 million. Between 2015 and 2020, IC sales for standard PCs are expected to grow by a CAGR of 4.1 percent to $71.6 billion in the final year of the updated outlook, while table integrated circuit revenues are projected to fall by -3.9 percent 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 percent to more than $1.1 billion.