Consumer Electronic IC Industry to Enjoy Modest Growth

Diffusion: Predicts Demand for Consumer Electronic System-on-a-Chip Solutions Will Grow to 1.77 Billion Units by 2011 Annual worldwide shipments of consumer electronic (CE) system-on-a-chip solutions (SoCs) are expect to grow from 1.11 billion in 2005 to 1.77 billion in 2011, an compound annual growth rate (CAGR) of approximately 6.9%. This modest rate of growth reflects the evolution of the CE integrated circuits (IC) market to a more mature stage characterized by:

• Continued rapid growth in unit sales due to expanding demand for products and services in developing countries (driven primarily by mobile handsets); and

• Declining revenue per unit, a reality that will make factors such as power and cost efficiency increasingly critical for sustained competitive advantage.

There is a specific set of drivers that will be responsible for the long-term growth in this market. Technologies and applications such as video processing; support for rapidly expanding digital functionalities; video synthesis; artificial intelligence (e.g. speech and image recognition); and improved power and cost efficiency (especially for mobile/portable devices) will provide the core impetus for the global CE IC market, which will in turn cultivate more widespread demand for System-On-a-Chip solutions or SoCs.

The general trend in CE IC offerings continues to be towards integrated functionality, combining multiple programmable and fixed-function cores on a single chip or platform. Such high levels of integration help to improve cost, size, and power competitiveness while retaining flexibility and enabling quick time to market by using software upgrades.

In addition to developing integrated offerings, IC vendors are expected to deal with maturation of the CE market by (1) retaining core technology advantages, (2) widening the scope of existing business beyond IC and basic software, and (3) expanding into related technologies and markets.

Consumer Electronic Processors – A Strategic Assessment of Key Trends and Market Drivers thru 2025 Publ 20060706