Despite gloomy predictions from market researchers, stock prices for DSP and FPGA vendors are shooting through the roof. What's going on?
As the first quarter comes to a close, public companies and market research firms are updating their numbers&mdashand the DSP numbers are worrisome. According to researcher iSuppli, growth in mobile phones will slow dramatically this year. Not surprisingly, this will put enormous price pressure on DSPs. In fact, the Semiconductor Industry Association (SIA) says this is already happening. Troubles in the cell phone market have already hurt some DSP vendors, most notably Infineon.
Of course, handsets aren't the only big market for DSP. Consumer electronics (CE) has emerged as a major market—and a major source of growth—for DSP technology. Unfortunately, iSuppli also says that CE markets are slowing down, and that this slowdown will doom anybody smaller than Apple.
With all of this gloom and doom, the stock prices for DSP technology vendors ought to be plummeting—but this isn't happening. Apparently the market knows something the analysts don't: Analog Devices and Altera stock prices are up 25%, while the prices for Xilinx and TI stock are up by over 10%. I can't explain this apparent mis-match in predictions, except to point out that DSP guru Will Strauss expects the DSP market to grow 8% this year and 15% in 2008. I don't see how this is possible given the tough market conditions, but far
So who is right: the doomsayers at iSuppli, or Will Strauss and all those optimists buying stocks? Write me and tell me what you think.
From the unrelated news department: A story in today's EE Times had one of the funniest industry quotes I've read in a long time. Asked about his plans for fabs, Microchip's CEO said "We don't ever build fabs. We buy other people's mistakes."