Still wedded to cell phones. We keep wagging a finger at the analog IC industry, but nobody listens. Every time a Nokia pulls back on production, companies like Texas Instruments, National Semiconductor, even Maxim and Linear Technology wind up eating some inventory. Market researcher, iSuppli Corp. is modifying its analog forecasts.
El Segundo, Calif. - After achieving 17.4 percent revenue growth in 2004, the worldwide analog IC market is decelerating in 2005 due to a slowdown in the mobile-phone market.
Following a flat first half for the analog IC market, analog revenue growth is expected to amount to 5.8 percent for all of 2005, iSuppli predicts. Global analog IC sales will rise to $39.8 billion in 2005, up from $37.6 billion in 2004. The longer-term outlook for analog ICs appears somewhat brighter, with revenue growing to $59 billion in 2009, rising at a Compound Annual Growth Rate (CAGR) of 9.5 percent from $37.6 billion in 2004, according to iSuppli.
Mobile-communications-specific parts represent the single largest market for analog ICs, accounting for 23 percent of sales in 2004. The robust handset market during the past two years has driven mobile-communications-specific analog IC products to 17 and 21 percent growth respectively in 2003 and 2004.
However, mobile-phone sales growth will slow dramatically in 2005, with worldwide unit shipments rising only 5.3 percent in 2005, compared to 23.3 percent in 2004, according to iSuppli. This will restrain mobile-communications specific analog IC revenue to just 3 percent growth in 2005, iSuppli predicts.
Weakness in the mobile-phone upgrade market will continue during the next five years, holding the CAGR for mobile-communications-oriented Application-Specific Analog ICs (ASSPs) down to 6.5 percent for both revenue and units. The mobile communications infrastructure, wireless broadband access and wireless LAN markets will continue to show healthy growth, even as the mobile phone upgrade market flattens.
Voltage regulators remain the strongest product line in analog ICs, despite a slowdown in growth in 2005. Worldwide revenue for voltage regulators is expected to rise by 13.7 percent in 2005, down from 18 percent in 2003 and 24 percent in 2004. The forecasted five-year CAGR for voltage regulators will be 16.2 percent.
Other questions addressed by iSuppli: What are the expected pricing trends for analog ICs? Which other application markets are driving analog IC sales? How much will sales of specific analog IC part types grow in 2005 and beyond?