SAN JOSE, Calif. Embedded processors and connectivity chips are bright spots in a semiconductor market that will see double-digit dips in computer and cellular chip sales in 2009, said Mario Morales, vice president of global semiconductor research at International Data Corp.
The need for more intelligence in a broad range of embedded systems is driving 15 percent compound annual growth in embedded processors. Chips sales will rise from more than three billion in 2007 to nearly seven billion in 2012, IDC forecasts.
Less than three percent of popular devices such as digital TVs and set-top boxes sport connectivity today, another ripe area for growth. Here combination chips that support multiple standards such as Bluetooth, Wi-Fi and others are rising from 20 percent of today's connectivity chips to 60 percent by 2012, Morales predicted.
"Companies focusing on platform plays that marry many technologies will be successful," he added in an interview at the annual IDC Directions event here.
Having weathered many up and down cycles already, "the semiconductor industry is still very resilient," Morales said.
It will need to be resilient. In a forecast released in February IDC said the first half of 2009 will be more severe than the last quarter of 2008, the overall economy won't bottom out until the end of 2009 and it won't recover until mid 2010.
"The biggest concern is there's no visibility on demand," said Morales. Companies carrying a lot of debt that requires renewed financing in the next nine months are at the most risk. "They are in real trouble," he added.