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2019 Microprocessor Slump Snaps Nine Years of Record Sales

Daniel Nenni

Admin
Staff member
MPU market being pulled down by weakness in smartphones and servers, as well as the fallout from the U.S.‑China trade war. A modest rebound is expected in 2020, followed by new all-time high sales in 2021.

The microprocessor market’s string of nine straight record-high annual sales between 2010 and 2018 is expected to end this year with worldwide MPU revenue dropping 4% to about $77.3 billion because of weakness in smartphone shipments, excess inventories in data center computers, and the global fallout from the U.S.-China trade war, according to IC Insights’ recently updated forecast. Microprocessor sales are expected to stage a modest rebound in 2020, growing 2.7% to $79.3 billion (Figure 1) and then are forecast to reach a new record-high level of about $82.3 billion in 2021, based on IC Insights’ outlook for MPUs in the Mid-Year Update to the 2019 McClean Report.

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Figure 1
The Mid-Year Update projection pulls in the previously expected 2020 slowdown in MPU sales to this year and deepens the decline compared to the 2019 McClean Report’s original January forecast, which showed a 3.9% increase in microprocessor sales in 2019 followed by a negligible decrease of 0.1% in 2020. Total MPU revenue is now expected to increase by a compound annual growth rate (CAGR) of 2.7% between 2018 and 2023, reaching $91.7 billion in the final year of the forecast. Total microprocessor shipments are projected to rise by a CAGR of just 1.0% in the forecast period to reach 2.4 billion units in 2023.

About 29% of microprocessor dollar-sales volume in 2019 is expected to come from cellphone application processors ($22.2 billion) and 3% from similar mobile MPUs in tablet computers ($2.5 billion). Nearly 52% of total MPU revenue in 2019 is forecast to come from central microprocessors used in notebook and desktop PCs, “thin-client” Internet/cloud-computing systems, servers, mainframes and supercomputers ($39.8 billion). Nearly all of the central-processing unit MPUs in computers are based on the x86-based designs sold by Intel and rival Advanced Micro Devices and just 1% of the sales total having RISC architectures, such as those licensed by SoftBank’s ARM subsidiary in the U.K.

About 17% of total MPU sales in 2019 are now expected to come from embedded-processing applications ($12.9 billion), says the Mid-Year Update of the 2019 McClean Report. Embedded MPUs continue to be a bright spot in the market with sales forecast to grow 10% in 2019 from $11.7 billion in 2018, when these processors represented about 15% of total microprocessor revenue. Embedded processor sales are being driven by increased connection to the Internet of Things (IoT), growing automation and artificial intelligence in systems, and the spread of sensors in cars, industrial equipment, consumer products, and other end-use applications.

Report Details: The 2019 McClean Report
Additional details on the MPU market are provided in the Mid-Year Update to The McClean Report—A Complete Analysis and Forecast of the Integrated Circuit Industry. A subscription to The McClean Report includes free monthly updates from March through November (including a 200-page Mid-Year Update), and free access to subscriber-only webinars throughout the year. An individual-user license to the 2019 edition of The McClean Report is priced at $4,990 and includes an Internet access password. A multi-user worldwide corporate license is available for $7,990.

To review additional information about IC Insights’ new and existing market research reports and services please visit our website: www.icinsights.com.

PDF Version of This Bulletin
A PDF version of this Research Bulletin can be downloaded from our website at http://www.icinsights.com/news/bulletins/[/TD]
 

Arthur Hanson

Active member
Obsolescence is the main driver of MPU sales, since they have a very long natural life span, but a for shorter economic one. Continuously advancing applications and uses are the real drivers and this is what should be looked at for driving future growth. Automation of everything and medical from diagnostics, wearables and implanted devices have the potential to be major growth areas along with 5G and IOT becoming the fabric of everything. The trends are becoming faster and closer together from technology feeding on itself and compounding, which is the greatest force according to scientist and financial people. Much of this takes place in a most unpredictable fashion with intermittent drops and spikes, but has a record over time of accelerating penetration of existing areas the ability to create entirely new fields and uses. Short term predictions are very difficult due to politics, which we are seeing now with the trade war, which is definitely slowing down progress, although it will be temporary, it always is. Sadly war of all types is one factor that give technology a quick jolt and we now will soon find out how this applies to cyber and advanced drone warfare. I sincerely hope the main drivers will come from new improvements that enrich our lives and protect the environment.

Comments, thoughts and additions solicited and welcome on these points.
 
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