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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (5823)	10/4/2002 2:15:17 AM
From: The Ox	Respond to of 95520

Message 18070994 FORWARD CONCEPTS' DSP MARKET BULLETIN 10/3/02 2002: "Steady as She Goes" The World Semiconductor Trade Statistics (WSTS) this week released chip shipment numbers through August, and we present highlights of the programmable DSP trends in this bulletin. The good news is that DSP shipments (revenues) were up 21% over July shipments. This is not unusual, since the last month of the quarter is almost always higher than the two earlier months. Clearly, having to report revenue to the Securities Exchange Commission (and stockholders) every quarter is great incentive to ship everything possible at the end of the quarter. But, better news is that August shipments were up almost 36% above the same month a year ago, which was the only down year ever experienced in DSP chip shipments. Europe is still a growth market for GPRS and WCDMA, as GSM is reaching saturation there. Korea is also reaching saturation, but cdma2000 1x is a growing market, creating new demand for the multimedia-enabled 3G phones. The U.S. has not yet reached saturation, so both subscriber growth and replacement growth look good for 2003. Dramatic Application Market Shift The increase in wireless dominance is illustrated in the table below. Note that wireline has exhibited the most dramatic negative shift, since the telecomm market is still in its "nuclear winter." Automotive, principally entertainment and telematics (rather than power-train applications), has increased significantly, though from a small base. However, after steady increases over the past 15 months, there was a drop in DSP shipments to that market for the last two months. Perhaps early ordering for the new model-year has resulted in an inventory glut. DSP Market by Application ($) CY (Jan-Aug) Application 2001 2002 Wireless 55.1% 62.4% Computer 11.6 9.2 Wireline 11.3 6.9 Consumer 6.7 7.3 Automotive 2.5 3.1 Other 12.8 11.1 Total 100.0% 100.0% Major Geography Shift DSP chips for cellular handsets constitute the largest market and are the real market movers for this year and going forward. The biggest cellular market is now China, and the table below compares geographic shipments for 2001 and 2002 (through August). DSP Market by Geography ($) CY (Jan-Aug) Location 2001 2002 Americas 26.5% 21.6% Europe 25.4 27.3 Japan 14.8 10.3 Asia-Pacific 33.3 40.8 Total 100.0% 100.0% Note that Asia Pacific's dominance is the clear result of the growth of wireless in China and Korea. Europe's share increase is certainly due to the increased shipments of GPRS cellphones there. The drop in Japan's market share may be temporary, as shipments there were low in the first part of 2002, but have increased since June. What About 2003? Forward Concepts believes that we're still on track for just a 5% growth this year, compared to last year's 31% drop, and we're sticking with our earlier 20% growth forecast for 2003. Our earlier five-year forecast is holding steady and is presented below for reference: PROGRAMMABLE DSP CHIP MARKET (WORLDWIDE, $MILLIONS) 2001 $4,256 2002 $4,469 2003 $5,362 2004 $7,132 2005 $9,129 2006 $11,411 CAGR 21.8% Forward Concepts Developments We are in the final stages of editing the new edition of our landmark study on the 2.5G & 3G wireless infrastructure, now expanded to include detailed subscriber and cellphone information by country, by technology. We expect it to be published by November 1st. Feedback We always welcome your comments, so feel free to contact me directly with any observations on DSP that you may have. Will Strauss wis@fwdconcepts.com