There has been plenty of growth hype for 802.11 or Wi-Fi, but few semiconductor companies will profit from this industry, according to a new report from D-Side Advisors, a market research and consulting firm in San Jose, Calif.
"IC companies are being squeezed from both top and bottom," said Charles DiLisio, president of D-Side Advisors. "The bottom-up squeeze comes because there are simply too many IC firms chasing after the Wi-Fi communications business. The top squeeze is due to customer expectations for product priced at under $99," he said in the report.
The Wi-Fi chip market is indeed becoming absurd. "Let's say 15 firms are planning to get 30 percent share of the market," he said. "We all know that just isn't going to happen. But such competition will unleash 'Pit Bull' behavior as Wi-Fi OEMs pit vendor against vendor to drive chip costs down."