For 2008, Foreward Concepts predicts unit cellphone growth in North America to be 5.8%, down from last year's 13.4%. Western Europe growth has also slowed, predicted to be only 2.8% compared with 4.5% in 2007.  FC believes this is due to both saturation and the slowing world economy. Korea's unit growth is forecast to be relatively flat at 1.1%, while Japan's is predicted to turn negative, with growth declining by 3.4%. Although Africa and the Middle East are predicted to grow a healthy 24%, that's on a very low base.  Because of the high growth  (and high base) of China and India, we predict the worldwide cellular handset growth to be 9.7% in 2008 compared to last year's 14.7%.

Source: Forward Concepts

Significant changes in DSP chip shipment reporting has begun in 2008, forcing FC to modify estimation of total DSP silicon and DSP vendor market shares.  Several companies that have previously reported monthly shipments of their products (to the World Semiconductor Trade Statistics program) as "DSP chips" now report them as ASICs under the "MOS Special Purpose Logic" category (MOS=Metal Oxide Semiconductor).  Under that are sub-categories of cellphones, wireline, computer, etc.  In short, DSP silicon is loosing its identity as a separate "DSP chip" category.

For example, Agere Systems, first acquired by LSI Computer for its (DSP-based) hard disk drive (HDD) controller line, has had its (DSP-based) cellular operations acquired by Infineon.  Infineon has no catalog DSP chips in its portfolio and has long reported its DSP-based silicon (mostly as cellphone basebands) as ASICs. Consequently, absorbing the Agere wireless product line (previously reported as DSP chips) has resulted in zero "DSP chips" being reported by Infineon.  And, LSI Computer may report shipments of its now-substantial HDD chip line as ASICs, too (However, LSI also retained Agere's wireless infrastructure business, another significant DSP market).

Then there is the MediaTek acquisition of Analog Devices' cellular product line.  DSP shipments from that product line will no longer be including in ADI's finances, and MediaTek is likely reporting those products as ASICs, as well.  The net result will likely be a diminished size of the reported "DSP Chip Market", and an increase in the DSP-based "ASIC cellular, ASIC computer, ASIC wireline, etc. Markets."  However, the overall "DSP silicon" shipments will continue to increase because without DSP (technology) there would be no digital wireless, no digital multimedia, no VoIP, and no HDTV. 

The charts below compare Cellphone DSP Shipments from September through this February with those of Cellphone Special Purpose Logic  shipments.  At first glance, it appears that reported DSP chip shipment revenue fell a whopping 22% in January and 19% in February.  Although January Special Purpose Logic shipments showed a slight drop, February shipments were up an amazing 20%.  Only in rare cases do shipments rise and fall so dramatically over successive months, so we see this as simply transferring silicon from one category to another.  Note that Special Purpose Logic Cellphone shipments are bigger, since the category includes more than just DSP silicon (like LCD drivers).

Source: Forward Concepts

Perhaps a better way of looking at this is to examine the monthly shipment changes between the two categories.  Note that in September 2007, shipments in both categories were up almost 18%.  From December through February, it appears that Cellphone DSP silicon has morphed into Cellphone Special Purpose Logic (or "ASICs").  It is likely that the same trend applies for other DSP categories, including consumer, wireline, automotive, etc.  The sands of time (and silicon) continue to change.

Source: Forward Concepts

Forward Concepts has released a study called "Femtocells: The Emerging Solution for Fixed Mobile Convergence,"  provides strategies and insight into the evolving femtocell equipment and chip Markets.

Contact:
Will Strauss, president, Forward Concepts, www.fwdconcepts.com, wis@fwdconcepts.com