Market Trends of Processor Industry
APUs to Acquire a Significant Share
- An application processor is a system-on-a-chip (SoC) processor responsible for the optimal functioning of applications running in a mobile operating system. APUs are used in a wide range of electronic devices like tablets, e-readers, smartphones, netbooks, gaming consoles, and automotive navigation devices.
- The rising penetration of mobile devices, such as smartphones and tablets, is one of the key factors contributing to the market growth for APUs. For instance, according to Ericsson, at the end of 2022, 6.6 billion smartphone subscriptions were estimated, accounting for about 79% of all mobile phone subscriptions. This is expected to reach 7.8 billion in 2028, accounting for around 84% of all mobile subscriptions.
- A smartphone application processor comprises a chip that assists the smartphone's operating system. The performance of the smartphone is at the optimal level with the use of an application processor. Customers' smartphone experience continues to increase due to the use of advanced processors.
- Further, with the growing demand for smartphones with high-end graphics, an increasing number of mobile phones are being produced with advanced application processors. For instance, Samsung's Exynos 9 Series 9810, a premium application processor, is designed for artificial intelligence (AI) smartphone applications, tablets, and other media devices.
- Moreover, the widespread use of application processors in wearable devices and other applications such as automotive ADAS and infotainment systems positively impacts the market growth. Also, with the increasing adoption of emerging technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT), there is a rising demand for data-centric real-time applications, augmenting the Application Processor market.
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China to Register one of the Fastest Growth Rates
- China is the largest producer and exporter of consumer electronics in the world. Thus, it is one of the most prominent regions for the market as processors are used in a wide range of electronic devices. Moreover, the mass adoption of smartphones and smart devices by end users, cloud computing, big data, and AI by regional small and medium enterprises, and an increasing number of interconnected devices due to IoT further support the growth.
- The electronics manufacturing industry has also maintained steady expansion in recent times. As per a report by the China Academy of Information and Communications Technology, during the two months from January to February 2022, the added value of major electronics manufacturers rose 12.7% year-on-year, compared with the 7.5% growth seen in the overall industrial sector in the country.
- Moreover, China has experienced significant economic growth over the years, which is also reflected in the data center industry in the country. Currently, 47,000 data centers operate in the country with 1400 megawatts of capacity.
- In February 2023, China-based CPU manufacturer, Loongson, announced its brand new 3D5000 CPUs for China's domestic server market segment and HPC customers. As per the company, the CPUs offer high performance for cloud / super-computing and large data center workloads while providing up to 4 times faster performance than typical ARM chips.
- China also leads in 5G adoption globally. As per GSMA, the number of 5G base stations in China exceeded 2.3 million at the end of 2022, including around 887,000 built during the year. The country will likely be the first market with 1 billion 5G connections, reaching the milestone by 2025, as per the organization.
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