The worldwide wireless LAN (WLAN) semiconductor market is expected to pass the $4 billion mark by 2012 with a compound annual growth rate (CAGR) of 22.8%. While PCs will remain the largest application segment for WLAN semiconductors, mobile phone applications will grow at a CAGR of 49.3% and become the second-largest category for WLAN semiconductor revenue by 2012. IDC expects the MIMO-enhanced 802.11n technology to be the next growth driver for this market as the higher throughput and range provide a great opportunity for new applications and usage models.

Key Findings

• WLAN adoption is set to grow beyond notebook PC and into the mobile phone and consumer electronics devices.
• WLAN is set to take off in mobile handsets with dual-mode phones that provide both conventional cellular and WLAN connectivity.
• Connectivity is the fastest-growing segment for semiconductor companies, with WLAN leading the way. Mobile handsets and mobile internet devices will lead integration of WiFi radio with other radio technologies such as Bluetooth, FM, and GPS for personal area networks, and sharing of content and services.

Learn More
Read IDC's study, Worldwide WLAN Semiconductor 2008–2012 Forecast (Doc #214316). The study forecasts the worldwide WLAN semiconductor market from 2008 through 2012, and discusses assumptions and major market trends. It also presents revenue and shipment forecast data by end application and technology standard.

Worldwide Mobile Phone Semiconductor Market to Pass the $45 Billion Mark by 2012

The worldwide mobile phone semiconductor revenue is expected to increase by more than 6% this year and reach $45.7 billion in 2012. Connectivity and other multimedia related semiconductor content, such as flash memory, will remain the primary drivers of revenue growth in this market as mobile phone functionality continues to expand. Demand for data processing, entertainment, navigation, and search functionality will expand both the high-end and the midrange of the semiconductor market as these features cascade to these segments.

Growing Trends

• Connectivity continues to hold the most promise for revenue growth over the forecast horizon as several emerging technologies gain traction in the mobile phone market.
• Multimedia and applications processing will also provide strong growth opportunities for the semiconductor industry.
• NAND flash will continue to expand in revenue and bit densities.
• Integration, economies of scale and platform solutions will be key focus areas for the most successful semiconductor suppliers over the next several years.

Get Forecasts by Air Interface Standard, Semiconductor Device Type, and Geography
Check out IDC's Worldwide Mobile Phone Semiconductor 2008–2012 Forecast (Doc #214178), which presents forecast information by air interface technology (2G — GSM and CDMA/TDMA/PDC/iDEN/PHS; 2.5G — GSM/GPRS, EDGE, and CDMA2000 1X RTT; 3G — WCDMA, CDMA2000 EV-DO, and TD-SCDMA; and 3.5G — HSDPA/HSUPA), by semiconductor product type (digital baseband processors, applications processors, multimedia coprocessors, analog baseband, memory, image sensors, radio/connectivity chipsets, and power amplifiers), and by geography.

While xDSL Semiconductor Market Decreased in 2007, Cable Modem Semiconductor Market Grew 58%

While the xDSL semiconductor market decreased by 21% to $980 million in 2007, the cable modem semiconductor market grew 58% to $579 million over the same period.

Factors Contributing to the Overall Decline in xDSL Market

• Delays in xDSL deployment resulting in some chipset inventory buildup.
• Continuing consolidation as Texas Instruments and Centillium sold their product lines to Infineon and Ikanos, respectively.
• Cable and PON gaining opportunities to displace xDSL as the predominant broadband access infrastructure.

Factors Driving the Cable Modem Semiconductor Market

• Cable multiple system operators (MSOs) have been extremely successful in selling bundled services, particularly in North America.
• Integrated VoIP functionality continued to help cable modem semiconductor revenue grow during 2007.
• DOCSIS 3.0 also began to affect market growth positively. This new standard enables cable MSOs to offer data rates that exceed those offered by xDSL.

IDC’s Words of Advice
Companies still face opportunities to gain revenue from both xDSL and cable semiconductor markets, but the key will be timing as both markets must deal with pressure to decrease prices per port and the growing discussion about installing a PON infrastructure. Vendors will need to continually enhance their product lines, from both the xDSL and cable side, to relieve price pressure. At the same time, for suppliers who invested in PON semiconductor development, securing early design wins will allow them to keep existing customers and establish a base to grow the PON business.

Uncover Vendor Shares
Read IDC's study Worldwide xDSL and Cable Semiconductor 2007 Vendor Shares: Consolidation Was Inevitable (Doc #213667).

Growth Outlook for the Worldwide Dedicated Foundry Market

The worldwide dedicated foundry market is anticipated to increase at a compound annual growth rate (CAGR) of 9% through 2012. Growth drivers will include end market demand, and the continuing growth in outsourcing by fabless and IDMs, as well as the shifting of the entire foundry industry toward lower process technology nodes and larger wafer size. IDC believes that consolidation will continue to occur, especially among the smaller foundry players due to their lack of ability to scale like the leading suppliers.

Other Findings

• The top 4 foundry players and selected integrated device manufacturers will drive the main 12 in. capacity growth with a CAGR of 21.3%.
• The industry ASP is expected to decline due to severe vendor competition throughout the forecast period.
• The entire industry is shifting to more advanced technology, even though in the short term 12 in. capacity growth has been lower than expected.
• The foundry market in China continues to grow and is anticipated to account for about 16.7% of the worldwide total foundry market share throughout the forecast period.

LEARN MORE
Check out IDC's study, Worldwide Dedicated Foundry Semiconductor 2008–2012 Forecast and Analysis (Doc #213560). This study describes the long-term trends of the dedicated foundry marketplace by delineating the capacity and market-sizing trends, and providing snapshots of the key players. The study also examines the key drivers from the supply and demand perspective.

"The prospects for mobile phone semiconductor growth, through the balance of 2008 and the first half of 2009, have moderated recently due to the pessimistic outlook of some top mobile phone OEMs. Slower mobile phone demand is pinching margins and profits, most recently at Nokia and Sony-Ericsson, and is setting the tone for more modest semiconductor growth over the next several quarters at least. IDC anticipated this slowdown and, in its mid year analysis, forecasted 4.2% revenue growth in 2009 from 6.2% in 2008. The growth rates for 2009 may be scaled back further in IDC's upcoming end-of-year forecast update, as mobile phone OEMs further squeeze their chipset suppliers in response to the continuing economic and financial crisis affecting the broader economy and consumer buying habits." – Flint Pulskamp, program manager for IDC Wireless Semiconductors.

AMCC Showing SFP+ 10GBASE-LRM Solution with Avago Technologies
"The market for 10 Gbps connectivity solutions is expanding rapidly as more system designers seek to add higher performance links in data centers," said Aileen Arcilla, Senior Analyst with IDC. "The demonstration of interoperability provides yet another data point that 10 Gbps datacom traffic can be successfully transmitted over greater distances to meet the highly demanding 10GBASE-LRM specification. This marks another milestone for deploying 10G in the market.".
Trading Markets
September 27, 2008

IDC Briefings at CES International 2009
Meet Mario Morales from IDC's Semiconductor team.
January 8-11, 2009
Las Vegas, NV
For more information contact [email protected]

Asia/Pacific Semiconductors

• China Semiconductor 2008–2012 Forecast and Analysis - Doc # 213564
• Worldwide Dedicated Foundry Semiconductor 2008–2012 Forecast and Analysis - Doc # 213560

Semiconductors: Consumer Devices

• Intel Broadens Its Platform, Reaching into Mobile Handhelds, Internet TV, and Scalable x86 Servers - Doc # 214161
• Broadcom Buys Out AMD's Digital Television Semiconductor Business - Doc # 214084

Semiconductors: Networking, Broadband and Storage Systems

• Worldwide VoIP Semiconductor 2007 Vendor Shares: Market Potential Yet to Be Realized - Doc # 214042
• Worldwide Telecom/Datacom Semiconductor 2007 Vendor Shares: Surprise! Some Market Opportunity Remains ... - Doc # 213880
• Worldwide xDSL and Cable Semiconductor 2007 Vendor Shares: Consolidation Was Inevitable - Doc # 213667

Semiconductors: Overview

• Worldwide DRAM Demand and Supply 2Q08–4Q09 and 2008–2012 Update - Doc # 214201
• Worldwide NAND Flash Demand and Supply 2Q08–4Q09 and 2008–2012 Update - Doc # 214200

Semiconductors: Personal Computing

• AMD Spins Off Manufacturing Business - Doc # 214671
• Intel Launches Third Generation of vPro Platform Semiconductors for Business Desktop PC Users - Doc # 214524
• AMD Updates Market on Server Processor and Platform Road Map - Doc # 214152
• Worldwide x86 PC Core Logic Chipset 2Q08 Vendor Shares - Doc # 213891
• Worldwide PC Processor 2Q08 Vendor Shares - Doc # 213890

Semiconductors: Wireless

• Ericsson and STMicro Joint Venture Continues the Consolidation in the Mobile Phone Market - Doc # 214238
• Worldwide WLAN Semiconductor 2008–2012 Forecast - Doc # 214316
• Worldwide Mobile Phone Semiconductor 2008–2012 Forecast - Doc # 214178
• Worldwide Applications Processor and Media Coprocessor 2007 Vendor Shares - Doc # 213825

Contact Anne-Sophie Dankens at 508-935-4313 or [email protected]