SCOTTSDALE, Arizona -- Despite increasing numbers of mobile phone subscribers, despite more services on offer over more frequencies, despite more base-stations being required and installed, the market for semiconductor components sold into cellular base stations is set to fall over the next five years, according to market research firm In-Stat/MDR.
Base-station semiconductor revenue is forecast to drop from just under $2.3 billion in 2003 to just under $1.6 billion in 2007, a compound annual growth rate -8.8 percent, In-Stat said.
"There is no one main reason why base station semiconductor revenue is forecast to decrease over the next five years, but rather many, that when taken together, spell decreasing revenues," said Allen Nogee, a principal analyst with In-Stat/MDR, in a statement.
"These include the long life-span of cellular base stations, increased manufacturing efficiencies, the lack of exponential customer uptake of new wireless data services, increasing spectrum efficiency of cellular technologies, and decreasing component prices. Add these factors, and you have a clear picture that points to problems for those companies that manufacture base-station components," he added.
Of the multiple technologies covering second and third generation communications now on offer, deployment of wideband-CDMA base-stations is growing at a good enough rate to see semiconductor revenue expanding at a CAGR of more than 16 percent, said In-Stat/MDR.
However, the company continued to say that chip vendors pursuing W-CDMA are under more price pressure because W-CDMA equipment must be very inexpensive for carriers to successfully deploy the technology.
A report entitled 'Rough waters ahead: five-year base-station component forecast' and priced at $3,495 contains forecasts for both total base station semiconductor revenue and power amplifier semiconductor revenue for TDMA, CDMA, GSM, PDC, and W-CDMA base stations, for the years 2002 through 2007, In-Stat/MDR said.