Tablet processor shipments will grow 23 percent to 299.7 million units in 2014 from 243.1 million last year, said IHS. Qualcomm, Samsung, Intel to fight for tablet processor market share in coming years.
In 2015, tablet processor shipments will increase 18 percent. The market will touch 400 million units by 2016.
Leading chip makers – Samsung, Qualcomm and Intel – will face competition from smaller rivals.
They will chase market share from Apple iPad and Samsung’s Galaxy.
IHS noted that Samsung Electronics is the maker of tablet chips for the iPad, still the industry’s best-selling tablet.
Qualcomm, the chief supplier of baseband chips for smartphones, is also placing a huge bet on the tablet space with semiconductors that provide cellular functionality to complement the built-in Wi-Fi feature of tablets.
Intel Bay Trail processors could be in entry-level, 7- to 8-inch Android tablets by the first quarter, while later generations of chips—such as Cherry Trail and Willow Trail—are planned for future implementation down the road.
IHS says the main challenge facing Intel will be how to compete in the entry-level segment. The category, which claims one-third of the tablet processor market, is crowded with Chinese vendors known for producing lower-end but more affordably priced chips.
The Chinese makers include the two largest vendors, Rockchip and Allwinner, as well Amlogic, which is much smaller but still boasts of considerable volume.
Another player, MediaTek from Taiwan, is already a major supplier of processors for smartphones that is now looking to infiltrate the entry-level tablet market. MediaTek is also known to be fiercely competitive in pricing.
The tablets for which Chinese vendors are supplying could cost as little as $50, so the tablet processors being made for these companies are also priced much lower than comparable chips made for Tier 1 tablet brands.
Meanwhile, other Chinese vendors are said to be training their sights on higher ground, which could pose another threat to Intel. Here the aim is to gain design wins with global brands like Lenovo and Hewlett-Packard, which have tablet models straddling the midrange.
Earlier, IHS in a report said Apple and Samsung were the top semiconductor spenders in 2013 among original equipment manufacturers (OEM) making more than $1 billion in revenue.
Apple was in first place with chip spending in 2013 of $30.3 billion, outspending Samsung’s $22.2 billion by more than $8 billion.
However, the South Korean electronics titan attained the largest spending increase on chips of any Top 10 OEM last year, up almost 30 percent from 2012 levels, compared to a smaller expansion of 17 percent on the part of Apple.
Combined, the two claimed about 14 percent of total spending in 2013, ahead of other prominent chip buyers. Rounding out the Top 5 are Hewlett-Packard in third place, with $10.1 billion in spending; Lenovo in fourth, with $9.2 billion; and Dell in fifth, with $7.7 billion. The rest of the Top 10 includes Cisco Systems, Sony, Huawei Technologies, Panasonic and Toshiba.
Meanwhile, Gartner said the top 10 companies bought $114.0 billion of semiconductors, to account for 36 percent of semiconductor vendors’ worldwide revenue in 2013. This was up from $105.1 billion, accounting for 35 percent in 2012. The top 10 outperformed the overall semiconductor buying market and grew by 8.4 percent in 2013.
