However, due to the strong promise of the technology, Epcos still is likely to find success in this area, iSuppli believes. Epcos' strategy calls for it to eventually become a provider of complete RF subsystems, rather than a seller of discrete MEMS components. Offering more complete solutions will be key to success for Epcos.

Competing with the wireless semi giants
“In the wireless-semiconductor market, demand for components increasingly is being concentrated among the Top-5 mobile-handset OEMs,” said Francis Sideco, senior analyst for wireless communications at iSuppli. “These Top-5 OEMs are purchasing platform reference designs from the semi suppliers and not discrete chips.”

While these platforms typically require expertise in both the digital and analog portions of the handset architecture, there are still some top chipset suppliers that need third-party help on the analog portion of the RF subsystem—i.e. everything in between the Power Amplifier (PA) and the antenna.

“If Epcos can field a product portfolio that differentiates it from the incumbents in the RF segment, then it will have an opportunity to partner with a baseband chipset supplier to get on its reference design,” Sideco added.

MEMS motives?
The NXP deal represents just one step Epcos has taken on the path to MEMS leadership, iSuppli believes. Epcos has stated that MEMS technology offers attractive growth opportunities in applications besides RF, including microphones and pressure, acceleration and rotation-rate sensors.

Epcos in February 2007 acquired Aktiv Sensor, a German MEMS pressure sensor manufacturer. Epcos also started serial production of FBAR filters in 2006, parts that belong to the RF MEMS family of devices.

iSuppli believes that within the next few years, Epcos is likely to become a leading supplier to the mobile-handset industry.