Intel forecasts substantial embedded chip growth

Chipzilla is confident that it can chomp up an even larger market share over the next few years, with an Intel employee forecasting substantial embedded chip growth.

In an interview with Reuters the vice-president of Intel’s Embedded and Communications Group, Doug Davis, gave some good news for the chip market, predicting that the market for embedded chips would grow by as much as 25 percent over the next four or five years.

This figure is a seven percent increase on previous annual growth between the years 2002 and 2008, which saw 18 percent growth. Growth dropped during the recession as businesses cut back on IT budgets and individual users put off upgrading their PCs, but renewed confidence is starting to filter into the market again.

Intel believes the embedded chip market represents a $15 billion opportunity for it, citing the need for embedded chips in almost every sector of industry, such as cars, medical equipment and electrical grids. With the PC market maturing, and thus offering less potential for growth, Intel is turning its focus to embedded chips.

Davis said that many factory machines are not yet connected to other devices, which require the use of embedded chips. He said that would change, even going so far as to predict a 30-40 percent annual growth for Intel’s Atom chips, which are utilised in laptops, netbooks and tablets.

With the tablet market set to explode over the next year or two with a flood of Android and Windows Phone 7 tablets, such substantial growth may be possible.

This may make up somewhat for Intel’s recent downgrade of its forecasted third quarter results, which were revised downward from $12 billion to $11 billion. Intel blamed poor consumer demand on its revised forecast, but that looks set to change over the next few years, at least for the embedded chip market.