Embedded semiconductors now account for 10% of the overall microprocessor market, according to IC Insights. The firm estimates the size of the global market for microprocessors at $66.6 billion, meaning the market for embedded processors is worth about $6 billion.
Roughly one-third of embedded processors are found in network equipment, according to IC Insights analyst Bill McLean. Another 1.5% are used in computer peripherals, 1.8% are in consumer applications and 1.1% are in automotive applications.
Two-and-a-half percent of embedded processors are used in industrial and medical equipment, the analyst firm estimates. This number is expected to grow rapidly as new, less expensive low-power connectivity chipsets enable internet access for many devices that have never been connected before.
Mobile phone applications are projected to drive 27% of microprocessor sales this year. Personal computers, servers and mainframes will use 58% of the microprocessors sold this year.
Semiconductor capital spending
IC Insights sees the semiconductor industry increasing capital spending by 6% this year. That follows a 3% increase last year and a 2% decrease in 2015.
Samsung is projected to be the biggest spender, boosting capital spending 11% to $12.5 billion. Intel is expected to increase investment by 25% to $12 billion. The other top investors are projected to be TMSC and SK Hynix.
Part of Intel’s increased capital spending will be its Fab 42 plant in Chandler, Arizona. The plant is expected to employ roughly 3,000 people and create another 10,000 support jobs in the community.
Fab 42, which Intel has been planning for several years, will make “the most advanced seven-nanometer semiconductor chips on the planet,” Intel CEO Brian Krzanich has said. The seven-nanometer process means the smallest spacing between repeated features on a chip along one direction is seven nanometers, which means more transistors can fit onto each wafer. Right now the most advanced chips on the market are made using a 14-nanometer process. Seven-nanometer processes will provide an estimated 35% speed improvement, use 65% less power and provide more density, according to analysts.
