MediaFile

Tablets are shaking up the chip industry, even more

March 9, 2012

Tablets like Apple’s iPad are on their way to becoming a great equalizer of the semiconductor industry.

Sales of semiconductors used in tablets are ballooning and are set to nearly double to $18.4 billion by 2014 , according to a new report from IHS iSuppli.  Although still smaller than the  chip market for mobile phones and personal computers, that’s a massive market — and one that has not been dominated by one or two behemoth players. Last year, tablets were only the No. 8 destination for microchips.

Intel has long ruled over the PC industry and Qualcomm has enjoyed a similar position in cellphones, but the fast-growing tablet market is almost completely up for grabs, and each device needs a broad range of chips. Application processors attract the lion’s share of attention form from Wall Street investors but the iPad and other tablets are also packed with radio frequency chips, DRAM memory, NAND storage, sensors and analog semiconductors made by everyone from Avago to Samsung.

“Media tablets and handsets are a key driving force in reducing some of the consolidation in the semiconductor industry that has developed in more mature markets like PCs,” Dale Ford, head of IHS’ electronics & chip research said in a report.

Diversity is one of the reasons tablet and smartphone manufacturers have been quick to embrace  the business model that has grown up around ARM Holdings, whose technology is licensed by a wide range of chipmakers, each adding their own distinct twist to individualize their offerings.

Intel appears to be making inroads into smartphones with its Medfield processor but even if it and future chips do well, the venerable grandfather of the PC industry is unlikely to ever achieve the same degree of success in tablets and smartphones.

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