The first generation of highly integrated silicon tuner ICs for use in advanced consumer electronic products will hit passives sales hard during the next few years, according to a research report from online distributor iSuppli.
Jay Srivatsa, principal analyst in the Consumer Platforms practice at iSuppli and author of the report, says the chips will be specified in products such as digital set-top boxes, cable modems and digital TV sets, adding that they will wipe out the need for other components.
"The advent of the tuner IC will obviate the need for tens of billions of passive and discrete components used to make more than 300 million can tuners each year for household appliances such as TVs and VCRs," he said.
Srivatsa forecasts that companies with tuner ICs in their product range will see revenues for these devices grow from $3m in 2001 to more than $400m annually by 2005.
The growth will occur even as average selling prices for the devices decrease from $15 to just $3 in the same time frame.
"It's bad news for a range of suppliers of traditional can tuners, and could spark a major supply chain dislocation for the manufacturers of passives and discretes that supply billions of components to them each year," said Srivatsa.
"Since these [tuner IC] modules will still have significant passive and discrete content for a couple of product generations, smart component suppliers should look to ally themselves with these emerging tuner IC module manufacturers to best insulate themselves from the coming downturn in component demand."