Mobile semiconductor revenue up 15 per cent on the back of smartphone demand

Smartphone shipments surged by 71 per cent in 2010, pushing revenue in the handset semiconductor market up 15 per cent year on year, according to figures from ABI Research.

The Mobile Device Semiconductors Market Data report said that Qualcomm, Texas Instruments, Samsung, Apple, and Marvell made up the top five vendors.

The Wi-Fi connectivity chip market saw an overall revenue increase of 62 per cent as tablets improved market penetration, while revenue from applications processors rose by 34 per cent.

Consistent demand for smartphones has become the major driver behind semiconductor market growth, explained Peter Cooney, practice director at ABI Research.

"In view of the return on investment and the technological barriers to entry, many semiconductor vendors are contemplating merger and acquisition strategies to align their technologies for the future," he said.

"The total revenue delivered by handset semiconductors is set to continue growing over the next five years, driven primarily by the growing numbers of integrated circuits supporting multiple functions in the next generations of smartphones."

Competition within the handset semiconductor markets in predicted to intensify as M&A activity rises, Cooney added.

Intel completed its acquisition of Infineon's wireless solutions business in the first quarter, while Broadcom acquired Beceem in November 2010, marking a return to the leading edge of the processor technology market.

In January 2011 Qualcomm announced its intention to acquire Atheros, and Samsung announced plans to make acquisitions at CES in Las Vegas.