Total microprocessor sales to edge slightly higher in 2020

Total microprocessor sales are forecast to grow 1.4% in 2020 to nearly US$79.3 billion, following a 2.4% decline in 2019, which was the first revenue drop in the worldwide MPU market in 10 years, according to IC Insights.

IC Insights indicated its mid-year forecast shows total MPU sales strengthening with an 8.8% increase in 2021 to reach a new annual high of about US$86.3 billion, under the assumption that vaccines become available for the COVID-19 virus and the health crisis diminishes in most regional markets next year.

Within the microprocessor market, sales of central processing units (CPU) used in traditional PCs, tablets, servers, supercomputers, and all other types of computers are benefiting from increased Internet usage during the global Covid-19 virus health crisis. IC Insights expects sales in this segment to rise 2.2% to US$41.7 billion this year and account for 52% of the total MPU market.

About 49% of total MPU sales this year (US$38.6 billion) are expected to be generated by microprocessors built with the x86 architecture and sold by Intel and AMD for traditional PCs, servers and large computers, IC Insights said. MPUs in touchscreen tablet computers - most of which are ARM-based system-on-chip (SoC) processors - are expected to account for 3% of total MPU sales in 2020 (US$2.3 billion), while computer CPU microprocessors made with architectures other than x86-based cores are forecast to be 1% of the total (US$750 million).

Handset application processors - nearly all built with RISC-computing cores and technology licensed from Arm - are expected to account for 26% of total MPU revenue in 2020, IC Insights indicated. On account of the economic fallout from the coronavirus pandemic, sales of application processors for smartphones are expected to decline 3% to US$20.9 billion this year. However, smartphones sales are expected to gradually improve in the fourth quarter of 2020, especially with demand growing for 5G handsets.

IC Insights forecasts that 21% of MPU sales this year will be generated by MPUs used in embedded-processing systems including automotive applications (passenger cars, trucks, and buses), data networking and communications equipment, industrial and medical systems, and consumer products. The embedded-processor portion of the MPU market is expected to climb 5.0% to US$16.7 billion in 2020.