DSP market overview newsletter I received.
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FORWARD CONCEPTS' DSP MARKET BULLETIN
3/21/02
2001: A Year to Forget
As you must know by now, the semiconductor market experienced its worst sump in history last year, with a decline of 33% in monolithic integrated
circuit chips. And DSP was no exception, with negative growth for the first time in history. DSP chip shipments reported by semiconductor manufacturers to the World Semiconductor Trade Statistics (WSTS)
organization totaled $4,256 million in 2001, representing a drop of 30.7% from year 2000 shipments.
DSP Market Shares
After many contacts and extensive interviews with the major DSP chip vendors, Forward Concepts has estimated 2001 market shares as follows:
PROGRAMMABLE DSP CHIP MARKET SHARES
Company 2000 Share 2001 Share Y-Y Change
Texas Instruments 44.0% 43.5% -0.5%
Agere Systems 22.8% 16.1% -6.7%
Motorola 13.2% 12.0% -1.2%
Analog Devices 10.2% 8.2% -2.0%
Other 9.9% 20.2% +10.3%
Total 100.0% 100.0% N/A
DSP Shipments($mil $6,142 $4,256 -$1,886
WSTS Mystery
Notice that "Other" in this table doubled in market share, while the major DSP vendors lost market share. From a revenue standpoint, "Other" increased by some +45% when the entire chip market was negative by over
30%, and the collective DSP market was also negative by over 30%. Since it strains credibility to believe that any chips increased in sales by 45% last year, something must have changed.
What has changed, it appears, is that the WSTS 2001 classification changed over the 2000 classification. We know that at the end of 2001 WSTS
reclassified over $90 million of microcontrollers (MCUs) to the DSP category. But that's not enough to account for the 45% revenue increase. By the rules of WSTS, they do not divulge which companies report into any
given category. In fact, they won't even confirm that TI reports into this category.
We suspect that at the beginning of 2001 one or more companies reclassified their product(s) from another category (perhaps from ASIC, or microperipherals, or even MCU) to the DSP category. We checked with most
of the companies with revenues in DSP-centric chips big enough to account for the change, but have yet to learn which one(s) decided to change their chip classifications.
So, what does all this mean? It means that the DSP market actually dropped more than the 30.7% reported, and if we were to measure market share changes of the four major companies based on last year's WSTS
classification, their market share changes would be far less dramatic, with TI probably gaining (slightly) in market share.
What About 2002 and Beyond?
Forward Concepts is forecasting a moderate 15% increase in programmable DSP chip revenues this year, compared to a predicted overall monolithic IC market increase of 8%. Increasing cellular sales will lead the recovery,
but a number of smaller markets are also doing better, too. Markets like digital cameras and MP3 decoders, for example. The MP3 decoder chips are finding sockets in a wide variety of products now, not just portable flash
memory players. One can now find MP3 (and other Internet audio) decoders in jukeboxes, portable CD players, console CD players, car stereos, digital cameras, camcorders, PDAs, DVD players, and cellphones.
Wireline and telecom markets are not likely to improve until the second half of 2002, but we are forecasting a 33% DSP market jump in 2003, based
on recovery of the telecom market and the replacement cellphone market that will increase sharply as new phones with added features for "3G lite" and GPRS reach volume shipments. Our current five-year forecast is
presented below:
PROGRAMMABLE DSP CHIP MARKET
(Worldwide shipments $mil)
2001 $4,256 million
2002 $4,894
2003 $6,509
2004 $8,527
2005 $11,086
2006 $14,189
CAGR 27.2%
DSP: The Technology Driver
It is clear that wireless will continue to be the programmable DSP market driver over the forecast period; however, the market for "embedded" DSPs,
found in a great variety of products, is an even bigger market that we will discuss in later market bulletins. DSP technology (in whatever form) is the only way you can get to the Internet: narrowband, broadband, or
wireless. It is also the key to the emerging packet (IP) telephony market. And without DSP, there is no multimedia. So, DSP has become the technology driver for the entire semiconductor industry, but the programmable DSP chip market is just the most visible part.
Forward Concepts Changes
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