INDUSTRY OUTLOOK 2001 -- INFORMATION
Computers and Chips
It's hard to imagine that a product selling more than 150 million units a year could be past its prime. But looking at the plunging shares of onetime highfliers like Gateway (GTW), Dell (DELL), and Apple (AAPL), you would think the personal computer industry has one foot in the grave.......
.....The pain won't be evenly spread. Even as makers of commodity parts suffer, companies selling specialty chips will likely show revenue increases of 30% or better. Both Texas Instruments Inc. (TXN) and Analog Devices Inc. (ADI), for example, make digital signal processors, which manage the torrents of data coursing through everything from cars to televisions. These DSPs should see strong gains as more and more products go digital. Likewise, National Semiconductor Corp. (NSM), STMicroelectronics (STM), and others will continue to profit from a boom in analog chips, which are used in devices such as cell phones to help DSP systems translate analog signals--a caller's voice, for example--into digital blips for transmission over the network.
businessweek.com
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DSP growth expected to slow from torrid pace in 2001
By Darrell Dunn
Electronic Buyers' News
(01/02/01 09:14 a.m. EST)
DALLAS --Despite a year-end slump in consumer demand, DSPs continued to shine as one of the fastest-growing semiconductor segments in 2000.
The sector enjoyed the same success as its key applications: cell phones and bases station equipment. Although those opportunities are expected to remain solid, at least one analyst believes weakened market conditions will slow DSP growth in 2001.
IC Insights Inc. projects the general-purpose programmable-DSP market, which rose 37% last year to $6 billion, will grow only 8%, to about $6.5 billion, in 2001, as it suffers the same problems that will cut growth in the semiconductor industry to only 7%.
Unit shipments of DSPs might still be up about 15% in 2001, "but as the overall market gets bigger, we're starting to see slower growth," said Brian Matas, an analyst at IC Insights in Scottsdale, Ariz. "There's plenty of excitement, new products, and new applications for DSP, but there'll be lower ASPs next year."
Much more optimistic is Will Strauss of Forward Concepts Co. in Tempe, Ariz., who believes DSP sales rose about 45% in 2000, to $6.4 billion, and will grow 35% this year, to $8.6 billion.
That doesn't include the function- and algorithm-specific IC DSP market, which totaled about $8.2 billion last year.
How the DSP market actually performs in 2001 hinges on the health of the wireless market, Strauss said. Sales to the wireless market accounted for about half of all general-purpose DSP sales in 2000 and could grow to 55% in 2001.
Total handset shipments are expected to reach 400 million this year, down from projections as high as 500 million, although handset manufacturers and some analysts have again projected the half-billion-unit mark for this year.
"There will be a downturn [in the semiconductor industry], but it'll be selective," Strauss said. "I haven't seen anything that's going to significantly slow down the worldwide wireless market. In fact, I've had to raise my prior [DSP] projections."
Texas Instruments Inc., whose DSPs were incorporated into about 60% of all handsets in 2000, will likely find similar success in 2001, although increased competition should begin to eat into the company's market share by 2002, Strauss said.
The StarCore DSP, jointly developed by Motorola Inc.'s Semiconductor Products Sector and Lucent Technologies' Microelectronics Group, has begun shipping in volume and will likely have an impact on the handset market as early as midyear, he said.
The Micro Signal Architecture, co-developed by Analog Devices Inc. and Intel Corp., won't have an impact until late this year. More likely it will be 2002 before devices based on the technology begin shipping in volume, analysts said.
Motorola's decision to license the ARM architecture is a signal that it has become serious in its attempt to move into the merchant market for handset chip sets. The ARM RISC-based processor architecture is used in most handset chip sets, including those from Analog Devices and TI and those planned by Intel. ARM is expected to replace Motorola's MCore in future chip sets.
The broadband-modem market will continue to provide opportunities for both general-purpose and fixed-function DSPs, although growth rates will likely be around 10%, Strauss said. Emerging high-performance DSPs, such as those offered by BOPS Inc. and LSI Logic Corp., will likely find new opportunities in the base station-infrastructure market, whose contenders also include StarCore and, to a lesser extent, TI's TMS320C6x architecture.
"The infrastructure has to grow faster than the installed user base because people stay online longer and are demanding higher bandwidth," Strauss said.
siliconstrategies.com
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Once again, conflicting views on semi sales for next year. I am still pretty bullish on ADI for the coming year. Lots of "new" DSP applications - like DSP for motor control (1 million units). Analog, interface and converter sales will hold up. Yes, the ADI-Intel chip is late and underpowered.
Jim |
