Winners, losers in cell-phone baseband biz

According to iSuppli's rankings, the winners were the 2.5G players, including Broadcom, Marvell, MediaTek, Renesas and Spreadtrum.

The losers were Infineon, Qualcomm, ST and TI. Global revenue from sales of 2.5G baseband ICs in the first quarter was up 4.2 percent from the fourth quarter of 2009. In contrast, 3G baseband revenue declined by 3.4 percent during the same period, according to iSuppli.

In the rankings in the baseband market for Q1, Qualcomm was in first place, followed in order by MediaTek, Texas Instruments, STMicroelectronics, Infineon Technologies, Broadcom, Renesas, Marvell Technology Group and Spreadtrum Communications, according to iSuppli.

In terms of growth from Q4 2009 to Q1 2010, Qualcomm fell 4.5 percent, MediaTek was up 17.2 percent, Texas Instruments fell 9.4 percent, STMicroelectronics fell 12.2 percent, Infineon Technologies dropped 12.1 percent, Broadcom jumped 125.6 percent, Renesas grew 200 percent, Marvell Technology Group was up 8.6 percent, and Spreadtrum Communications jumped 28.9 percent, according to iSuppli.

It turns out that suppliers focusing on 2.5G were the best performers in the in Q1, according to iSuppli. But only three vendors posted significant organic revenue growth, compared to the fourth quarter of 2009: MediaTek, Broadcom and Spreadtrum.

Renesas Electronics Corp.’s 200 percent surge could be attributed entirely to its merger with NEC Corp. and was not supported by organic growth. In comparison, Marvell Technology Group achieved modest growth of 8.6 percent during the period.

“With the explosive growth in smart phone sales, the wireless supply chain--from infrastructure equipment, to handsets, to semiconductors--has been completely focused on the massive growth opportunity in 3G technology,” said Francis Sideco, principal analyst, wireless communications for iSuppli, in a statement.

“However, in the first quarter, all the action was in 2.5G, mainly because of strong demand from Asia, a region still dominated by the older technology. While the first quarter is a slow period for wireless in many regions of the world, sales in Asia were strong because of the Lunar New Year holiday season. Furthermore, Broadcom enjoyed a major increase in 2.5G sales due to a major design win from a major OEM,” he said.

Qualcomm suffered from the 3G slump and saw its baseband IC revenue drop 4.5 percent sequentially. “Qualcomm doesn’t offer GSM/GPRS/EDGE-only baseband chips, which are the primary drivers for the 2.5G market,” Sideco said. “Instead, the company supports these technologies only as part of some of its 3G and LTE chips. In the cost-conscious 2G handset market, very few--if any--would pay extra for a 3G chip from Qualcomm only to use just the 2G part of it.”