Microservices Expo Authors: David Sprott, Liz McMillan, Roger Strukhoff, Carmen Gonzalez, Derek Weeks

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IDC Forecasts Worldwide Communications Processor Revenue to Increase at a 5.8% CAGR Over the Next Five Years Following Growth of 8.8% in 2013

Worldwide revenues for communications processors rose to $1.8 billion in 2013, an increase of 8.8% compared to 2012, according to the latest communications processor market share and forecast study from International Data Corporation (IDC).

"The communications processor market is on a steady growth path," said Abhi Dugar, Research Manager, Semiconductors at IDC. "The emergence of open standards is causing disruption in the traditional OEM, ODM, semiconductors, and embedded software value chain, creating new opportunities for merchant silicon vendors to displace ASIC-based proprietary solutions. A new breed of multicore communications processors, SOCs, and standalone MPUs implemented in 28nm process technology and below are starting to hit the market now, which are enabling better network visibility, manageability, and scalability in support of software-defined networking (SDN) and network functions virtualization (NFV) adoption by cloud service providers, web service providers, and telecom network operators. This is a secular multi-year trend that IDC believes will continue to drive the communications processor market forward over the next five years."

Vendor Highlights

In 2013, Freescale held the leading market position with 37.7% of the overall worldwide communications processor revenue share with its Power Architecture and ARM-based SOCs. Intel, with its x86 standalone MPUs, earned the second spot with 25.2% market share in 2013. With a 44.5% year-over-year increase in its revenues in 2013, Cavium's MIPS architecture-based SOCs placed third in market share at 13.3% in 2013. Avago/LSI and Broadcom earned the fourth and fifth market share positions respectively.

2014 and Long-Term Market Outlook

IDC forecasts that communications processor revenue growth in 2014 will be 5.1%, and the market will continue to expand at a compound annual growth rate (CAGR) of 5.8% through 2018. IDC observes that the decline in infrastructure capex spending that had negatively impacted the overall communications semiconductor market in the fourth quarter of 2012 and through the first quarter of 2013 reversed during the rest of 2013. Although the fourth quarter of 2013 was slow compared to the previous two quarters, IDC now believes that infrastructure spending is poised for stronger growth in 2014 following the improvement in job growth in the United States and stabilization of the sovereign debt issues in Europe.

The IDC report, Worldwide Communications Processor 2014–2018 Forecast and 2013 Vendor Shares (IDC #250050), provides the worldwide market forecast for communications processors for the 2014–2018 period as well as vendor shares for 2012 and 2013.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

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