Automotive and IoT will drive IC growth up until 2021
According to IC Insights’ new 2018 Integrated Circuit Market Drivers Report, integrated circuit sales for automotive systems and the IoT are forecast to grow 70% faster than total IC revenues between 2016 and 2021. ICs used in automobiles and other vehicles are forecast to generate worldwide sales of $42.9bn in 2021 compared to $22.9bn in 2016, while integrated circuit revenues for IoT functionality in a wide range of systems, sensors, and objects are expected to reach $34.2bn in four years compared to $18.4bn last year, says the new 358-page report.
Between 2016 and 2021, automotive and IoT IC sales are projected to rise by compound annual growth rates (CAGRs) of 13.4 and 13.2%, respectively, compared to 7.9% for the entire IC market, which is projected to reach $434.5bn in four years versus $297.7bn last year. As shown in Figure 1, strong five-year IC sales growth rates are also expected in medical electronics (a CAGR of 9.7% to $7.8bn in 2021) and wearable systems (a CAGR of nine percent to $4.9bn).
Cellphone IC sales - the biggest end-use market application for integrated circuits, accounting for about 25% of the IC market’s total revenues - are expected to grow by a CAGR of 7.8% in the 2016-2021 period, reaching $105.6bn in the final year of the new report’s forecast. Meanwhile, weak and negative IC sales growth rates are expected to continue in video game consoles (a CAGR of -1.9% to $9.7bn in 2021) and tablet computers (a CAGR of -2.3% to $10.7bn), according to the 2018 IC Market Drivers report.
Sharply higher average selling prices (ASPs) for DRAMs and NAND flash are playing a significant role in driving up dollar-sales volumes for ICs in cellphones and PCs (both desktop and notebook computers) in 2017. Cellphone IC sales are on pace to surge 24% this year to an estimated $89.7bn, while PC integrated circuit dollar volume is expected to climb 17.6% to $69.0bn.
For both the cellphone and PC market segments, 2017 will be the strongest increase in IC sales since the 2010 recovery year from the 2009 downturn. The 2018 IC Market Drivers report’s forecast shows cellphone integrated circuit sales rising eight percent to $97.3bn next year and PC IC revenues growing five percent to $72.6bn in 2018.
The new report estimates that automotive IC sales will rise 22% in 2017 to about $28.0bn after increasing 11% in 2016. Automotive IC sales are forecast to increase 16% in 2018 to $32.4bn. Meanwhile, IoT-related integrated circuit sales are on pace to grow 14% in 2017 to an estimated $14.5bn after increasing about 18% in 2016. In 2018, integrated circuit sales for IoT end-use applications are expected to rise 16% to about $16.8bn, according to the 2018 edition of the IC Market Drivers report.