SCOTTSDALE, AZ -- Total production value of electronic systems is projected to increase 5% in 2014 to $1.49 trillion and climb to about $1.82 trillion in 2018, a compound annual growth rate of 5.2% since 2013, according to a new report. 

Cellphones are extending their lead over standard PCs (desktops and notebooks) as the largest electronic systems market after overtaking PCs for the first time in 2013. Cellphones are also the largest end-use IC application, accounting for 25% of total IC sales in 2014 versus 21% for standard PCs.

The data are part of IC Insights’ just released 2015 edition of IC Market Drivers—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits.

Figure 1 (right) compares the relative market sizes and projected growth rates of 10 major systems segments among a couple dozen end-use electronic product categories covered in the report. Systems sales associated with the emerging Internet of Things are expected to rise by the fastest rate in the forecast period, growing by a CAGR of 21.1%. 

In 2014, cellphone handsets are expected to account for 18% of worldwide electronic systems sales ($265.2 billion) vs. standard PCs at 13% ($196 billion) of the total this year.

In 2013, PCs represented 15% of worldwide systems sales while cellphones were slightly less than 18% of the total, based on the new report’s market analysis. Tablet sales are expected to account for 6% of 2014 systems revenues compared to 5% in 2013, while dollar volumes for Internet of Things functions (embedded in end-use applications) are projected to represent 3% of the total electronics market, up slightly from 2013.

After dominating integrated circuit sales for most of the last two decades, standard PCs were unseated by cellphones as the largest end-use IC application in 2013.  The report estimates cellphone integrated circuit sales will grow 11% in 2014 to $70.7 billion from $63.5 billion in 2013.  Cellphone IC sales are forecast to rise another 11% to $78.4 billion in 2015.  Standard PC IC sales will pull out of a two-year slump (-11% in 2012 and -10% in 2013) to grow 4% in 2014, reaching $59.1 billion, according to the new report. PC IC sales are forecast to grow 2% in 2015 to $60.6 billion.