The rise of tablets will give a boost to ARM and a host of associated chip makers, while Intel and AMD will take a minor hit, according to Barclays.
"The primary change comes in our Atom-based netbook forecast which slips from 20 percent growth at 44 million units to 40 million units in 2010 and from 21 percent growth at 53 million units to around 10 percent growth or 44 million units for 2011," a Barclays report said.
Barclays sliced one to two percent of growth off its overall forecast for x86 processors. It now estimates the group will grow 18 percent to 398 million units in 2010 and 11 percent to 443 million units in 2011.
The analyst firm maintained its positive rating on Intel. However it said "investor perceptions of growth in tablet shipments [will] impact sentiment and the multiple afforded to Intel."
Barclays expects Intel will respond to the pressure with a lower powered Medfield processor in 2011 aimed at x86 tablets.
Advanced Micro Devices does not have a processor geared for netbooks, but could take a small hit from the expected decline in notebook growth. AMD is expected to roll out its integrated Ontario processor with on-board graphics for tablets and ultraportable PCs in early 2011. It also plans new notebook processors that could help it fuel growth.
Other companies that could suffer from a netbook decline include Atheros which owns about half the Wi-Fi sockets in netbooks, but could recoup sales in tablets, Barclays said. Marvell and Micron may also come under pressure as the tablet shift leads to lower sales of hard disk controllers and DRAM.
On the software side, Microsoft will also take a hit from the move toward tablets, losing as much as $400 million in forecasted 2011 revenues. "While we view Windows share losses as inevitable and sustained, impact on near-term financials [is] likely to not be severe," said one Barclays analyst in a report.
Microsoft recently cancelled plans for its own tablet design and shook up the management of its devices unit. Barclays said Microsoft's mobile/consumer strategy "remains confusing [with] six Windows embedded/mobile platforms."
ARM is the big winner in the forecasted shift from netbooks to tablets. Its partners including Nvidia, Qualcomm and Texas Instruments could see significant design wins in the 30 percent of the tablet market that does not go to Apple. Interestingly, Barclays made no mention of Freescale which also sells ARM-based processors for tablets and other mobile systems.
Barclays also called out many of the iPad chip suppliers as benefitting from the trend. They include Broadcom which provides iPad touch controllers and connectivity silicon, Skyworks and Triquint with RF and power amplifiers and Linear Technology with power management ICs.
The tablet is not an entirely an ARM play. Barclays noted tablets from Archos and the Cius tablet announced by Cisco Systems use Intel Atom chips. AMD's Ontario may get tablet design wins as well, it said.
Motorola and Research in Motion are also expected to launch tablets. Nokia and Dell already ship tablets. LG Electronics and Samsung plan to ship tablets before the end of the year. Hewlett-Packard previewed a slate computer, but may redesign it now that it has bid to buy Palm.
"What's interesting is there seems to be so many tablets, but I don’t think there are any big competitors to the Apple iPad that stand out yet," said Tim Luke, semiconductor analyst at Barclays. "We believe a lot of them will use Android and Chrome OS," he said.