Market for Base Station Silicon Tapering Off

In-Stat: During the next five years, suppliers that sell semiconductor components to the cellular base station market are likely to see their revenues slightly shrink, after modest growth from 2005 to 2007. As a whole, demand for cellular voice and data is expected to grow briskly in the next few years. But that won’t translate into higher revenues for chipmakers. Base station component makers are being asked to make cheaper components that last as long or longer than previous versions, and to develop them when the unit volumes required aren’t fully known, because demand for base stations isn’t known. Base stations continue to grow more dense, with more channels per card and smaller overall form-factors, while consuming less total power and requiring less air conditioning, or no air conditioning in many cases.

• Total base station silicon revenues are expected to drop to $3.7 billion in 2010 after rising to a peak in 2007.

• CDMA infrastructure semiconductor revenue is expected to increase for the next few years, and then taper off after 2008.

• New GSM infrastructure deployments remain strong, especially as many carriers update their equipment to GPRS and EDGE, but after this year, the total value of GSM infrastructure will start to drop.

Base Station/Power Amp/Semiconductor 5-Year Forecast Publ 20060125