Report: Tablets to Become 4th Largest User of Semiconductors by 2014

iSuppli Semiconductor 2012 Revenue

Tablets, led by the iPad, will become the fourth-largest application for semiconductors by 2014, according to research firm IHS iSuppli.

The exponential growth of the tablet market since the introduction of the iPad in April 2010 will place tablets only behind mobile handsets, mobile PCs, and desktop PCs, respectively. While Mobile handsets and PCs will still garner a majority of semiconductor revenue, the rise of the tablet is remarkable in that the category ranked 35th just two years ago.

Sales of semiconductors for use in media tablets are expected to skyrocket to $18.2 billion in 2014, up from $2.6 billion in 2010, the year that Apple kicked off the market with the introduction of the iPad. In 2014, sales of semiconductors for tablets are expected to be exceeded only by mobile handsets, mobile PCs and desktop PCs. In contrast, media tablet semiconductor sales in 2010 ranked lower than the relatively small-scale applications of workstations, USB flash drives, mobile wireless broadband wireless access devices and flat-panel monitors.

iSuppli Tablet Forecast

The rapid growth of the tablet market, one that has become a major focus area for nearly every consumer electronics company, saw tablets rise from 35th place in 2010 to 8th by 2011. Tablets are expected to reach 5th place by the end of this year before taking a solid hold of 4th place by 2014. 2012 will also see the tablet’s cousin, mobile handsets, take the top spot for the first time by displacing mobile PCs. 

iSuppli suggests the tablet’s rise will signal a dramatic shift in the semiconductor industry, as tablets will be far more diversified in their functionality and processing requirements than the industries they are challenging.

The rise of specific applications has led to the creation of semiconductor powerhouses in the past—such as the PC microprocessor colossus of Intel Corp. or the cellphone chipset juggernaut of Qualcomm Inc.” head of electronics and semiconductor research for IHS, Dale Ford said. “However, media tablets will generate semiconductor demand that is much more broadly diversified, spreading the opportunity among a wider set of suppliers than previous platforms did. 

While it’s clear that Apple has driven the tablet market thus far, new Android- and Windows-based products launching soon may further diversify the market segment in the coming years, lending support to iSuppli’s predictions.

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