Communications Still Integral to Semiconductor Industry

Despite the bursting of the bubble in 2001, communications remain a major market for semiconductors. Communications is still the second largest major segment of the semiconductor market, with 20.5% share in 2002. We expect that communications will gain share in 2003 and continue to do so over the long term.
 

As the recovery develops, a major driver is expected to be the ongoing transition from traditional circuit-switched transmission to packetized transmission. Media gateways, IP service switches and low-end routers are expected to see the fastest growth over the following five years, while markets for products such as core routers and DSLAMs are expected to experience little or no growth.

In-Stat/MDR has also found that:

• Particularly in WAN, the communications market is made up of a wide variety of products, produced by an even wider variety of companies and sold into several different markets. IC suppliers who target this market first need to identify the major growth market segments and second need to identify the major equipment OEMs within each of these segments.
• The communications market was the major driver in the rapid shift of semiconductor consumption from the Americas to Asia Pacific during 2001 and 2002.
• From a product perspective, Analog and MOS Logic are the major parts used in Communications products, and no major shifts are expected in this mix.

The report, "Key Players in Major WAN Equipment Semiconductor Markets," looks at the outlook for several categories of WAN communications equipment, including switching equipment, routing equipment, and DSLAM.