Not all doom and gloom for handset semicon

CIOL Bureau
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USA: Throughout the end of 2008 and beginning of 2009, many media sources and analysts have been painting a very bleak picture of the semiconductor industry for at least the next year. While it is true that the broad spectrum of what is considered semiconductors will have a challenging year, the economy will impact different product markets and different application segments with distinctly wide ranging degrees.


Clearly, semiconductors that are very commoditized in nature, such as memory, will be hit drastically with as much as a 30-40 percent drop in units shipped in 2009. However, high performance products such as 32-bit and 64-bit processors, and 32-bit and 64-bit core-based ASIC, ASSP and FPGA products, are likely to see less than a 5 percent contraction, and in many applications will still see slight growth in 2009.

According to Tom Hackenberg of IMS Research: “Specific applications segments will be more resilient in response to the economic contraction as well. For example, the mobile handset industry, with growing markets in developing nations and subsidized products in mature markets, will see some resistance to lower consumer purchasing power.

"Combine this with significant development in 3G and 4G technologies, as well as consumer demand for multimedia, touch screens, advanced applications, smartphones and high-end multimedia phones, and there are significant indications that the RF semiconductor industry may suffer closer to a 1 percent contraction and bounce back with double digit growth in 2010 and beyond. Digital baseband solutions are likely to rebound enough in the second half of 2009 to still see a little growth during the year and also expanding to double digits for 2010.”


The economic contraction is likely to push the trend for higher integration to decrease bill-of-material (BOM) costs even stronger in the handset industry. In the RF-front end, look for interesting solutions using single PAs in front-end modules that cover multiple bands as well as a large growth in integrated multi-mode solutions. In the digital baseband segment, expect to see more digital solutions to RF processes to the point of single chip solutions and other highly integrated cores.

Low power processors to perform energy management will become a key strategy moving forward. High performance modules for voice enhancements, data connectivity, videography, multimedia and alternative displays will all be needed to support a distinct trend towards smartphones and advanced feature phones.

While other industries that are more susceptible to budget constraints and shrinking consumer buying power will suffer more significantly, it is not all doom and gloom for semiconductors in mobile handsets.