Forecasting Winners and Losers

Mobile Semiconductor Market Share Forecast 2011-2016 forecasts market size and vendor share for six categories of semiconductors for mobile applications: cellular baseband processors, application processors, Bluetooth transceivers, mobile Wi-Fi chips, GPS receivers, and NFC chips. Data includes both revenue and unit estimates for the leading vendors of each of these products. The report includes final 2011 share, preliminary 2012 share, and 2013-2016 forecasts of the leading vendors’ market share for each category.

This unique report also provides an overall forecast of total units and revenue for each product category, with appropriate breakouts. For example, baseband processors are forecast by air interface, application processors by core count, and connectivity chips by combo category. New this year is coverage of NFC, including market share by vendor, a five-year shipment forecast, and a forecast of NFC integration into combo chips and baseband processors.

Our methodology combines bottoms-up interviews with chip suppliers with tops-down analysis of OEM shipments and their suppliers. Our model uses ongoing shifts in OEM share, technology (e.g., 3G to 4G transition), and product categories (e.g., tablet computers) to forecast which chip suppliers will benefit and which will lose out.

The report provides the detailed market information needed to sort out the dynamics of this market. With this report, chip vendors, OEMs, and investors will readily see which companies are the leading suppliers in a given product market, how these companies’ positions are changing, how big the mature product markets are, and how fast the emerging categories are growing.

Companies covered in the report include Broadcom, CSR, Freescale, Intel/Infineon, Marvell, MediaTek, Nvidia/Icera, Qualcomm/Atheros, Renesas, Samsung, ST-Ericsson, and Texas Instruments. This new edition forecasts the effects of TI’s phase-out of smartphone products, Samsung’s acquisition of CSR’s mobile products, and Samsung’s development of cellular-baseband technology.

The report includes a brief text summary providing analysis of the data and a set of market share tables and figures for each category. Companies purchasing a corporate license also receive the tables in Microsoft Excel form.

Market Research From The Industry Experts

As the leading vendor of analysis for communications semiconductors, The Linley Group has the expertise to develop a high-quality set of market estimates. Our entire analyst team applies its extensive experience and network of industry contacts to deliver the quantitative information you need to make informed business decisions.

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This report is written for:

• Product managers and executives seeking to assess the performance of their product lines over the past year or to identify areas in which to invest or divest.
• Strategic sourcing professionals and engineers at OEMs seeking information about semiconductor suppliers.
• Investors and financial analysts seeking data to support investment decisions.
• Public-relations professionals seeking to quantify their client’s success.

This report tracks mobile semiconductors that totaled $26.2 billion in 2011 revenue; we forecast this total to grow to $38.9 billion in 2016. This total includes cellular baseband processors and their associated RF and power-management chips, application processors (AP), mobile Wi-Fi chips, mo­bile Bluetooth chips, GPS chips, NFC chips, and combo connectivity chips. Baseband processors, including those with an integrated AP, comprise the largest segment of this market, generating $17.4 billion in 2011 alone.

Changes in the shipments of wireless handsets, smartphones, tablet com­puters, and other mobile devices have a large effect on the sales of these mobile chips. In 2012, Samsung, Huawei, and ZTE are gaining share rapidly in both smartphones and overall handsets, whereas Nokia, HTC, LG, and RIM are all losing ground. These share changes, along with supplier changes at several lead­ing vendors, help some chip suppliers and hurt others.

The market is also being roiled by changes in suppliers. In the past few months, Texas Instruments announced it will focus on markets other than smartphones and tablets, CSR announced it will sell its mobile products to Samsung, and Freescale canceled its next-generation tablet processor. In 2012, Samsung began shipping its first complete cellular processor, and Intel began ramping its first smartphone customers. These changes will put new opportunities into play and remove others from the table.

Qualcomm is gaining share in baseband processors in 2012 because it is the primary supplier to both Huawei and ZTE. We forecast Qualcomm’s unit shipments to rise from 521 million in 2011 to 605 million in 2012, giving it the market-share lead. Qualcomm will gain additional base­band share in 2013 because of new smart­phone wins at Nokia. The company also benefits from the overall market shift from GSM (which it does not supply) to UMTS (where it is a leader). As a re­sult, we expect Qualcomm to achieve 32.7% unit share by 2016.

Despite its acquisition of MStar, we expect MediaTek will fall just behind Qualcomm in baseband shipments in 2012. The Taiwanese vendor is further behind when measured in revenue, as its focus on GSM depresses the average price of its chips. MediaTek is ramping new UMTS parts, however, offering a threat to Qualcomm and other 3G suppliers at the low end of the market.

The most significant trend in application processors is the integration of the AP into the cellular baseband (AP+BB). In 2012, 50% of all smart­phones use AP+BB chips, including most or all devices from HTC, Huawei, Nokia, RIM, and ZTE. We forecast this percentage to rise to 70% in 2016, with more than half of the remaining units coming from Apple. As a result, the merchant market for standalone AP chips in smartphones will diminish over time even as smartphone shipments rise to 1.2 billion in 2016. On the other hand, most tablet computers will use standalone AP chips, helping this market reach 476 million chips in 2016, an increase of 69% over 2011 shipments.

In 2012, the leading AP vendor is “none of the above,” because 26.6% of the AP chips are custom products built for Apple and Nokia. Among merchant vendors, Qualcomm’s Snapdragon processors lead with 25.5% share, far ahead of Samsung, Broadcom, and other suppliers. We forecast Qualcomm, the leading AP+BB vendor, to extend this lead with new de­signs at Nokia and share gains by customers Huawei and ZTE. Nvidia, despite much publicity, will gain only 3.8% share of the AP market in 2012, but it has opportunities for future growth.

In 2011, Wi-Fi combo chips contributed 51.6% of all connectivity-chip revenue, and this portion continues to rise. Wi-Fi combo sales are driven by increasing smartphone and tablet shipments, and revenue is growing as these chips add new functions such as GPS. Bluetooth combos (which may include FM and GPS) are mainly used in feature phones and basic phones.

The shift to Wi-Fi combos benefits Broadcom, the leader in combos. We project the company will hold 54.2% of the entire connectivity market by revenue in 2012, up 3.9% from the previous year. We expect Broadcom to move to 69.2% share in 2016 as it takes advantage of TI’s withdrawal. The biggest threat to Broadcom, however, is Qualcomm’s strategy to integrate Wi-Fi into its baseband processors. Using this strategy, Qualcomm will gain 22.6% of the mobile Wi‑Fi market in 2016, according to our forecast. As other baseband vendors follow Qualcomm’s approach, the overall market for Wi-Fi combo chips will diminish.

CSR, which has little presence in Wi-Fi, continues to lead in Bluetooth and Bluetooth combo shipments; we project the company will hold 38.7% of the Bluetooth market in 2012. Once the acquisition closes, we expect Samsung to increasingly use these products in its own handsets. MediaTek is becoming a more prominent connectivity supplier as it breaks into the smartphone market, bundling its new combo chip with its processors. Broadcom, CSR, and MediaTek are also the leaders in stand­alone GPS chips.

NFC is starting to appear in popular smartphones, including the Samsung Galaxy S3. We estimate the NFC attach rate at 4.5% of all handsets in 2012, rising to 40% in 2016. This growth will drive shipments of mobile NFC chips to 1.17 billion units in that year, according to our forecast. Most of these chips, however, will be either combo chips or cellular basebands that integrate the NFC function. The current leaders in NFC chip shipments, NXP and Inside Secure, will not benefit from this trend because they lack the technologies required to create integrated solutions.