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Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (2850)	2/11/2005 1:02:34 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 2882

DSP Market Hits Nearly $8B in 2004, Firm Reports Online Staff -- 2/10/2005 Electronic News The DSP chip market was up 27.2 percent last year to $7.8 billion, driven primarily by the wireless market, according to market research firm Forward Concepts. Wireless constituted almost three-fourths of the DSP market, at 71.5 percent, up from 68 percent in 2003, Forward Concepts said. Most of the gains occurred in the first half, with the second half of the year being relatively flat. Mostly Chinese cell phone makers found themselves with a glut of inventory that had to be bled off, slowing new baseband chip orders, the firm reported. In terms of year-on-year revenue changes, although relatively small in size, the computer market segment, consisting mostly of disk drive controllers, grew the most at 47.7 percent, but still did not reach 2003 levels. The firm does not expect much future growth in this segment, as most disk drive controllers are utilizing SOCs that include read channels, and increasingly reported to the WSTS as ASICs. The automotive segment, consisting mostly of dashboard entertainment and navigation electronics and a small amount of drive train DSP silicon, is also small, but grew 35.5 percent last year and is trending upwards. The firm expects growth to continue in this segment. Wireless, being the biggest market segment, grew at a respectable 33 percent, thanks to Wi-Fi hotspots and voice-over-internet protocol (VoIP) applications. The firm expects continuing growth from this point onwards. The consumer segment had an outstanding 108 percent market growth in 2003 and stayed at a relatively high level of $654 million. Most DSP silicon in the consumer market is embedded, however, and is not classified as DSP. In fact, these SOC devices constitute some two-thirds of the universe of DSP-centric chips, Forward Concepts said. On a geographic basis, DSP chips for cellular handsets constitute the largest market and are the real market movers. With the biggest cellular market now being China, Asia Pacific (mostly China, but including Taiwan, Korea and Singapore) is now over half the world market for DSP silicon. On a vendor-ranking basis, TI continued to lead the pack, with shipment growth that increased its market share to 50 percent with $3.9 billion in DSP revenue. Freescale Semiconductor took the second seat with DSP revenues of $1 billion, Agere was third with $768 million in DSP revenue and Analog Devices came in fourth, with $600 million in DSP revenue for last year. Philips Semiconductor entered the top five DSP ranking for the first time with 2004 DSP revenue growth of 407 percent to $533 million. Forward Concepts attributes the dutch chipmakers rapid growth to its cell phone baseband chips, which passed the 30-million-unit mark in shipments. Looking to this year, with the DSP market largely driven by wireless growth that appears to be in the 10 percent to 12 percent cell phone growth range, the firm lowered its earlier DSP shipment forecast for 2005 from 20 percent to 10 percent. Forward Concepts expects that UMTS/WCDMA will finally catch on this year and 2006 will show healthier 25 percent growth as many subscribers upgrade to the newer technology. On a long-term basis, wireless is foreseen to remain the market to bet on, since cell phones are drawing in all the functionality and market shares of PDAs, MP3 players, digital cameras, GPS navigation, Wi-Fi and Bluetooth connectivity. Furthermore, VoIP has finally reemerged as a growth market, thanks to Vonage, AT&T, Skype and their cousins, Forward Concepts noted.