Semicast announces its 32/64-bit silicon leaders of 2014

Semicast defines 32/64-bit core silicon to include ASICs and ASSPs/SoCs with a hard 32/64-bit MPU core, FPGAs with either a hard or soft 32/64-bit MPU core, 32-bit MCUs and 32/64-bit embedded MPUs; compute CPUs are excluded. 32/64-bit core silicon is a substantial market, estimated to have been worth $67.1bn in 2014, or about one-fifth of total semiconductor sales.

Whilst Qualcomm was ranked the largest supplier in the vendor share ranking in 2014, with a market share of more than a quarter, it is the rise of Apple and MediaTek that most stand out. Apple can trace its beginnings in this market to the 2008 takeover of P.A. Semi, which enabled the company to bring development of the now well-known Ax range of applications processors in-house and under its own control. Apple has for several years been the only supplier of smartphones and tablets which has in-house control of both hardware and operating system development, and the success of the iPhone and iPad clearly demonstrates the benefits of this strategy. Having paid a reported $275m for P.A. Semi, Apple has seen a staggering return on its investment. In comparison, MediaTek’s rise up the rankings is a combination of success in Android-based smartphones and tablets and the 2013 acquisition of MStar Semiconductor; MediaTek is estimated to have had a market share of 7.7% in 2014.

Intel continues to invest heavily in the development of both baseband and applications processors for smartphones and tablets. Its latest product is the Atom X3 SoFIA processor, of which both 3G and LTE variants are offered. Intel is also leading the way with x86-based processors for smartphones and tablets, compared with Apple, MediaTek and Qualcomm, which are firmly committed to the ARM architecture. Colin Barnden, Principal Analyst, Semicast Research, and study author, commented “This does ensure that Intel has a differentiating factor in the marketplace compared with the other leading vendors, although it will ultimately be the market which decides if this differentiation is a successful strategy or not.”

In February it was announced that Intel is to acquire Lantiq, which will strengthen its position in digital home networks and help develop its strategy in IoT, while in March it was announced that Intel is also in talks to acquire Altera. Further, Intel purchased the Axxia networking business from Avago Technologies in August 2014, for $650m. Taking recent acquisition activity and market developments together, Semicast expects Intel to pass MediaTek in the share ranking in 2015.

Many other vendors in the top ten share ranking bear the scars of the brutally competitive cellphone market. Broadcom, Freescale, Renesas and TI have all had, and disposed of, a line of baseband processors, unable neither to compete technologically with Qualcomm in LTE, nor on price against the likes of HiSilicon, MediaTek and Spreadtrum. Similarly, Samsung’s phone division finds itself squeezed by Apple at the premium end of the market, and Chinese suppliers such as Huawei, Lenovo and Xiaomi at the low end. This has resulted in Samsung falling down the vendor share ranking for core silicon to number seven in 2014, having peaked at number two in 2010.

AMD has moved from the outer reaches of the core silicon vendor share ranking to ninth largest supplier in 2014, primarily as the result of its design wins in the PlayStation 4 and Xbox One consoles. Sony and Microsoft both adopted a broadly similar design strategy when developing the current generation of consoles, using x86 processors with high-end graphics to bring their products to market. AMD was a natural choice over Intel for such a design, having bought graphics specialist ATI Technologies in 2006, coupled with a semi-custom division which could tailor the designs to meet the exact needs of Microsoft and Sony. It is to be hoped that the future for AMD is brighter than that of the previous console processor winner, IBM. It had a clean sweep of the previous generation of consoles (Microsoft Xbox 360, Nintendo Wii and Sony PlayStation 3), but has since not only lost much of that business to AMD, it has exited the semiconductor business altogether, transferring its chip operations to GlobalFoundries at the end of 2014.

Semicast judges that the current (eighth) generation of consoles may well be the last. The redesign cycle for consoles has typically been between about five and seven years, so that would put the introduction of the ninth generation at around 2018 to 2020. Considering the extraordinary pace of development of applications processors for smartphones and tablets, it is hard to determine what a dedicated console could do that a smartphone or tablet could not by the end of this decade.

Hardcore gamers are unlikely to be satisfied with smartphone and tablet gaming, however, until the level of depth, attention to detail, immersion and storytelling matches that which applies to current console games. The shallow, trivial, arcade-style games and apps currently offered for Andriod & iOS do little more than kill a few minutes of time before bombarding gamers with marketing, advertising and subtly unfair gameplay designed to bring the user to a point where only an in-app purchase will allow them to continue playing - a frustrating situation.

Nintendo will likely be the test case in the short term, as it tries to develop its recently announced NX console in an attempt to catch up with Microsoft and Sony. Nintendo is in danger of going in the same direction as Sega, which never recovered from the poorly received Dreamcast console and today is solely a game developer.

Semicast’s view is that games consoles are set to join a growing list of products rendered obsolete by smartphones and tablets that includes handheld gaming, MP3 players, point-and-shoot cameras, camcorders, portable navigation devices and DVD players.

Barnden summed up “Apple, Intel, MediaTek and Qualcomm look to be the main winners for applications processors and baseband processors in smartphones and tablets. The industry has already moved on to wearables and IoT.”

2014 Preliminary 32/64-bit Core Silicon Vendor Share Ranking

Qualcomm 26.0%

Apple 10.7%

MediaTek 7.7%

Intel 7.1%

Broadcom 6.3%

Renesas Electronics 4.8%

Samsung Semiconductor 4.3%

Freescale Semiconductor 3.8%

AMD 3.2%

Texas Instruments 2.1%

Top 10 Total: 76.0%

Others: 24.0%

2014 Market Size: $67.1bn