Logic Integrated Circuit (IC) Market to 2020 - Programmable Logic Devices (PLD) and Application Specific Standard Product (ASSP) Dominate with a 78% Market Share

Additional Information

GBI Research’s new report, “Logic Integrated Circuit (IC) Market to 2020 - Programmable Logic Devices (PLD) and Application Specific Standard Product (ASSP) Dominate with a 78% Market Share”, provides the key information and analysis on the Logic IC market. The report covers the revenue segmentation based on the product segments in Logic ICs like ASIC, PLD, Display Drivers and ASSP. The report covers the key market trends in the overall Logic IC industry. The report provides market sizing and forecasts by end user segments. The Logic IC report also provides information on the revenues generated based on geographical regions. The market shares of key players in different product types are presented in the report

Programmable Logic Device (PLD) Segment to Offer Sales Growth

The increasing demand for Programmable Logic Devices (PLDs), consisting of Field Programmable Gate Arrays (FPGAs), general purpose logic devices, simple PLDs and Complex PLDs (CPLDs), is driving the logic Integrated Circuit (IC) market.

The PLD market has been growing at a fast rate due to short product development times and the availability of greater functionality at a lower cost. This market was valued at $7 billion in 2011 and is estimated to reach $9.6 billion by 2020, due to a demand for flexible devices to meet online data consumption needs and consumer electronics opportunities. Compared to existing semiconductor devices such as Digital Signal Processors (DSP) and microprocessors, PLDs have better Time To Market (TTM) value and are more flexible in terms of programming. This makes them a very good future alternative to microprocessors, as production costs generally increase with the amount of time spent on manufacturing and Research and Development (R&D). PLDs thus have an opportunity to achieve significant growth by 2020 as shown in the figure below.

PLD Market, Global, Predicted Revenues ($bn), 2004-2020

Source: GBI Research

Flat Panel Televisions to Drive Demand for Field Programmable Gate Arrays (FPGAs)

Flat panel televisions (TVs) are expected to open up numerous opportunities for FPGAs such as the Xilinx Spartan and Altera Cyclone FPGA families. FPGAs are considered part of the PLD segment, and hence demand for FPGAs will translate into demand for logic ICs. Flat panel display and TV producers have to be innovative. Not only do they have to differentiate their products from those of their competitors, they must also get their products to the market quickly. Original Equipment Manufacturers (OEMs) must use low cost FPGAs instead of ASSPs to maintain their edge in the market.

Shift from ASIC to ASSP with Large Scale Integration (LSI) Chip Manufacturing in APAC Region

While Application Specific Standard Products (ASSPs) have standard pre defined feature sets and are difficult to integrate with the latest technology features, Application Specific Integrated Circuit (ASICs) have long development cycles. These are the primary disadvantages that differentiate them in the view of an IC manufacturer. Most APAC semiconductor companies are ASIC-based System on Chip (SoC) LSI product manufacturers. These products can be customized to customer requirements. In contrast, ASSPs can be used for various segments in a market with minimal changes, and these companies have realized the importance of shifting from custom to standard product manufacturing through movement into the ASSP domain. Renesas has already developed ASSP mobile LSI chips that cater to the Long Term Evolution (LTE) standard in the communication sector. Toshiba is also actively working to increase its standard to custom products ratio by launching new ASSP products in the Liquid Crystal Display (LCD) TV segment. This move by the Japanese and APAC semiconductor companies in general to shift production from ASIC to ASSP is expected to reduce the ASIC market. Companies will have to compete with US based companies who are already market leaders in the ASSP field, and face challenges in making necessary changes to the process facilities in their fabrication plants.

Declining ASIC Design Starts

ASIC chip design projects which have resources allocated (design starts) and which are being sent to the manufacturer for sample production (taping out) are declining rapidly. Increasing costs for Non-Recurring Engineering (NRE), strong ASSP offerings along with FPGA emergence and system integration are the main reasons for this trend. The financial crisis in 2009 also acted as a major push for customers to switch to competitor technologies. The figure below shows this decline in ASIC based design starts and the consequent recovery in 2010 to a figure near the historic figures, the market can expect to face a period of flat growth until at least 2013.

ASIC Design Starts per Year, Global, 2005-2010

Source: GBI Research