PROCESSOR QUARTERLY MARKET MONITOR Computing Service - December 2020 With SMIC and UniSoC, China is finding new paths to self-sufficiency in the dynamic APU market. WHAT ABOUT THE THE PROCESSOR LANDSCAPE IS REORGANIZING AMIDST GLOBAL TRADE PROCESSOR QUARTERLY DISPUTES AND DESIGNER INNOVATIONS MARKET MONITOR? The recent SMIC IPO and positioning to gain large as the smartphone market, these are the A full package: APU foundry share has has signaled the beginning areas that are seeing real growth. The Processor Quarterly Market of a global restructuring of processor design and Monitor includes the following For reasons of optimum user experience and manufacturing. Additionally, UniSoC is gaining deliverables: improved data security, chip designers and steam and market share in the mid-tier phone • Excel database with quarterly software developers are moving more and more segments, and looking to break into the high-end. update on historical and forecast processing functions out of the cloud to the edge. data The application processor is the central chip for The edge is where the application processor is • PDF slide deck with graphs and managing and executing the many functions of key, whether in mobile, IoT, connected home, or comments/analysis covering which modern “smart” devices are capable. In the many other various consumer devices. expected evolutions fact, as more consumer devices become always- In the high-end laptop segment, Apple has • Direct access to a Yole on and always-connected, the APU becomes an Développement analyst attractive alternative to its traditionally more decided to shift the MacBook processor to in- for one year, providing an power-hungry x86-based counterparts. Within house silicon, announcing the impressive M1 opportunity for on-demand the smartphone segment alone, 2019 saw ~$36B SoC. Built on TSMC’s N5, this chip is a departure Q&A and discussions of revenue for application processors, making up from x86 architecture, which if successful, could regarding trends, analyses, 6% of total Semi revenue for that year. Among signal the start of a larger shift towards APUs in forecasts, and breaking the emerging applications that are dependent on more segments. This holds serious implications news application processors are wearables, connected for the CPU and GPU markets, which this Frequency: home, AR/VR, and ultralight PCs. Though not as monitor will cover starting in Q1 of 2021. Receive every quarter the updated Quarterly Market Monitor documents Application processor market dynamics per quarter Monitored applications: 60 30% • Smartphone, tablet, smartwatch (available from Q1 2020) 50 20% ) D 40 10% • Smart speaker, AR/VR, TV, S U s n ultralight PC (available from o illi 30 0% b ( Q2 2020) enue v e 20 -10% • Automotive infotainment (available r from Q3 2020) 10 -20% • CPU, GPU, NPU starting Q1-2021 • FPGA starting Q2-2021 - -30% Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 2018 2019 2020 2021 2022 2023 2024 2025 Get the sample of the monitor Apple Samsung Qualcomm HiSilicon MediaTek UniSoC Other Forecast Unit growth ASP growth on www.i-Micronews.com • Near term: seasonally weak Q1-20 and COVID-19 impacts are overlapped to place H1-20 revenue just 3% above H1-19. Production volume outpaced demand, keeping system builds afloat. Assuming a return to pre-COVID trajectories in mid-2021. • Long term: Following the bounce back of demand in 2021, expecting modest unit and ASP growth to combine for growing APU revenues, nearing $50B by 2023 “APU Market Revenue” is APU designers’ revenue for end-systems tracked in this monitor: Smartphone, (Yole Développement, December 2020) Tablet, APU-based Notebook, Smartwatch, Smartspeaker, SmartTV, AR, VR, and Automotive Infotainment WHAT TO EXPECT FROM YOLE DÉVELOPPEMENT’S PROCESSOR QUARTERLY MARKET MONITOR? The Quarterly Market Monitor examines and details of the processor landscape and where to forecasts the application processor segment expect inflections in the market. of the semiconductor industry, as dissected The monitor will also examine the reported across multiple dimensions. The monitor tracks financials of players within the ecosystem. processor revenue, units, and wafer volumes at both fabless chip designers and at the foundries Through this examination, the Quarterly Market themselves, sliced across various relevant Monitor will provide estimates of the amounts parameters including process node, end-product of revenue, margin, and capital expenditure segment, core and IP type, etc. Subscribers to (Capex) attributable to processors for key this product will become knowledgeable on designers and manufacturers. PROCESSOR QUARTERLY MARKET MONITOR Ref. YDM20096Q4 Yole Développement’s (Yole) Processor Quarterly networks impact the wafer volume requirements Market Monitorwill address the pressing questions for processor manufacturing ? facing this industry, including: • How much capital expenditure for wafer • Which logic nodes are critical for processors over fabrication equipment will be required to support the next 12-24 months? the processor forecast • What are the price and cost trends within the • What weight do key assumptions drive within the multiple tiers of the smartphone market? market forecast ? What is the range of market • How many 10nm/7nm/5nm/3nm wafer starts are possibilities for a given range of adjustment within needed to satisfy the demands of the processor base assumptions ? market for the next 5 years? Who will have the Underpinning the monitor are complex databases that necessary capacity to deliver for OEMs ? track processors and their respective end-products, • When will 5nm become a mainstream node for aggregated from highly detailed device and component processors? teardowns. An internal Yole model supports the • What implications do any delays of a process node monitor, which employs extensive data analysis on the carry to the processor market? historical processor and device datasets to understand • How do the trends in luxury and high-end and forecast the tendencies of segment designers and smartphones drive behavior in the designers and OEMs on key parameters such as transistor count and manufacturers of processors? density, speed, and processor core count to derive die • How do the performance trends of end-products size, wafer volume, cost, and performance. These translate into market trends of processors? insights are integrated with information gathered • Which end device segment is driving revenue, from across the Yole network and expert interviews unit, and wafer growth for processors? to create a robust market forecast, unique for Yole • How will new functionalities in embedded neural and its customers. Application processor wafers by node 300 250 200 ) m p w k ( n o i t c 150 du o r p r e f a w 100 50 - Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 2022 2023 2024 2025 3-4nm 5-6nm 7-8nm 10nm 12-16nm 20nm 28nm 45nm Avg Node (wafer basis) (Yole Développement, December 2020) WHAT IS NEXT FOR PROCESSORS? The long-term trend within the application cases, this calls for new hardware and software as processor industry is for OEMs to seek in AI training and inference. Designers, IP licensers, differentiation and demand increasing processing and manufacturers partner to meet those demands power for end-products, while living within the by adding capabilities to the traditional areas of power and BOM constraints of high mobility. computing and graphics, as well as the emerging Similarly in the microprocessor space, the system focus of innovation in neural network processing, designers seek to deploy ever-increasing computing deep learning, and artificial intelligence. In fact, capabilities at ever-increasing efficiencies. In some artificial intelligence enablement (through stand- alone or embedded AI accelerators) is the newest Application processor price per billion transistors differentiator for processor designers and OEMs. 0% Packing ever-increasing computational capabilities -5% into semiconductor devices has long been the ) s r o t trend for the whole of computing industry s ) i s -10% % ( n h ra t t history. The next decade of processors will be no w n o r o g r illi -15% a different. However, we are witnessing a slowdown b e r y e o p t r $ in the rate of cost decline for a unit of computing a S -20% e U Y ( P capability, and therefore processor designers will S A -25% have a choice to make: continue computational improvements at historical levels and accept the -30% 2018 2019 2020 2021 2022 2023 2024 2025 increasing costs, or adjust their innovation to Price per billion transistors Year to year growth match the rate of cost decline and live within (Yole Développement, December 2020) historical BOM and margin bands. We expect the QUARTERLY MARKET MONITOR COMPANIES MONITORED IN Application processor 2020 ecosystem* THE PRODUCT (non exhaustive list) OEMs Apple, Broadcom, Arm, Global Foundries, The Fabless Fonry business model succeeds by sharing risk, but interesting market Google, HiSilicon, HTC, Huawei, Lenovo, dynamics eist in both designer and foundry realms. LG, MediaTek, Meizu, OPPO, Qualcomm, Designers Semiconctor equipment Samsung, SMIC, Sony, Spreadtrum, TSMC, venors UMC, UniSOC, Vivo, Xiaomi, XMC, ZTE IP design spport Fonries Recent US-China trade actions focused on Huawei and Hisilicon have created opportunities for SMIC nonetive lst of compnies (Yole Développement, December 2020) AUTHORS decision designers make will depend on the evolve, and a quarterly market monitor is a John Lorenz is a Technology and Market specifics of their target markets. The dynamics critical tool for those looking for the advantage Analyst within the Computing & Software of players within this industry is continuing to of insight. division at Yole Développement (Yole), part of Yole Group of Companies. John is KEY FEATURES OF THE MONITOR engaged in the development of market and •Direct access to the analyst technology monitors for the logic segment •Quarterly data update of advanced semiconductors, with an initial •Market forecast through 2025, in $US, units focus on processors.