Though it's no surprise the digital signal processor (DSP) industry is one of the few semiconductor markets expected to enjoy significant growth in the next few years, just how successful it will be is not easy to predict, according to Allied Business Intelligence, a market researcher based in Oyster Bay, N.Y.
DSPs are to increase from a $4.3 billion industry in 1998 to $8.5 billion by 2002 -- far exceeding the semiconductor market as a whole, said ABI, which has just released a report, "DSPs: North American Markets, Competing Architectures & Forecasts."
But several factors make forecasting future DSP markets difficult. Most important is the blurring of boundaries between DSPs and other circuits, like general-purpose processors, microcontrollers, and hybrid chips. As DSP cores are implemented in many different types of integrated circuits, the question becomes when is a DSP no longer a DSP?
"In a very real sense, such boundaries are artificial and abstract, even though they lend some convenience to market forecasts," said J. Scott Moore, an analyst with Allied Business Intelligence who wrote the report. "One near certainty is that all technologies will benefit from cross-fertilization, with microprocessors incorporating DSP circuitry, and vice versa. Consequently, forecasts as to how many stand-alone DSP chips will be used in a particular market segment compared to hybrid chips performing the same function must be tempered with caution."
Many DSP functions will still be best served by a simple, dedicated DSP chip, he said. Most DSP experts believe, for many applications, cores make more sense in the early phases of a product cycle, while technological bugs are being ironed out. As an application becomes mature and establishes a significant market presence, economics dictate cost efficiency by moving to dedicated chips designed specifically for the application. These will often be DSPs, although in many cases they will be customized.
Among the market's competitors, Texas Instruments (company profile), with a 45 percent share of the DSP market today, a lock on 75 percent of the DSP software engineers, and almost a generation lead over its competitors in technology, will remain a formidable and dominant presence, ABI's Moore said. While the trend is away from dominance of any one architecture, TI's sheer heft in the market will sustain its lead for some time. "TI engineers are, if anything, extremely clever in adapting their product to today's DSP needs," he said.
There is likely to be some restructuring of the relative shares occupied by the major manufacturers, where the initiative seems to go to Analog Devices, at the expense of Lucent and Motorola, Moore said. "Siemens, with its prescient integration of DSP, RISC, and microcontroller circuits, is likely to join the ranks of the major players," he said.
The total shares lost by the major players will remain fairly small. However, in another 10 years, Moore said, the loss to smaller, more focused companies and their technologies will be acute due to the overall expansion of the marketplace.