LONDON " Manufacturers of the RF power amplifiers and RF power semiconductors used in cellular base stations are in for a rough ride over the next few years according to market research group ABI (Oyster Bay, NY). The main concern, according to ABI Research senior analyst Lance Wilson, is the inevitable slow down of large-scale GSM deployment.
The just published ABI study suggests that as existing cellular systems are progressively replaced by 3G networks, net spending on RF power amplifiers " due to an interplay of consumer usage patterns, system efficiencies and falling component costs " will decline as the new networks are rolled out.
Wilson maintains the tougher environment will not impact all manufacturers equally, with the independent manufacturers and suppliers of RF power amps being the biggest losers. The large OEMs who make the entire base station should be able to absorb the changes better, the study suggests.
The independent suppliers must be given credit for anticipating that this would happen, says Wilson. "They are trying to 'integrate vertically' to supply more of the base station."
The RF device manufacturers are, says Wilson, in an even tighter squeeze. "No matter whether the business goes up or down, the price pressure on them is so great that their problem is one of revenue. Their ASP is falling, and they are converting to lower-cost packaging that is going to drive prices even further down." Their only way out, he concludes, is to diversify into making other kinds of semiconductors that base stations also need.