gartner dataquest semiconductor industry and market outlook, 2q03 welcome!
TRANSCRIPT
Gartner DataquestSemiconductor Industry and Market Outlook, 2Q03
Welcome!
Semiconductor Industryand Market Outlook, 2Q03Session 1
Jeremey Donovan and James Hines
Semiconductor Device Forecast Update, 2Q03
Session 1 Agenda
Semiconductor MarketOutlook in 2003 ..……………… Jeremey Donovan
Fab Capacityand Utilization ..……………………… James Hines
Semiconductor Market Outlook in 2003
Jeremey DonovanVice President
Key Issues
1. How is the business outlook for the semiconductor industry changing?
2. How are the application markets for semiconductors evolving?
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
2003 forecast almost unchanged from the 15 February update (was 8.9%, now 8.3%)
2003 cellular phone production revised upward from 434 million to 440 million units
Mild 2003-2004 downward revision to PC forecast; mild 2005-2007 upward revision
Downward revision to DRAM forecast
Forecast Update: Essentially No Change
0
25
50
75
100
125
150
175
200
225
250
275
2002 2003 2004 2005 2006 2007
Automotive (12% CAGR)
Communications (13% CAGR)
Consumer (12% CAGR)
Data Processing (8% CAGR)
Industrial (9% CAGR)
Military/Aerospace (5% CAGR)
Note: Percentages are CAGRs for 2002 through 2007.
Worldwide Semiconductor TAM ($B)
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Supply Outlook: Semiconductor Inventory
Dataquest Semiconductor Inventory Index (DASI)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03
Let the good times roll …
Excess Inventory Peak
It couldn’t last forever …
Back to Normal
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Supply Outlook:Semiconductor Inventory
Consumer OEM
Wireless Comm. OEM
Wired Comm. OEM
Storage OEM
Compute OEM
Auto OEM
EMS/CEM
Semi. Distribution
Semiconductor Vendors
Total Industry
TrendHealth
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Supply Outlook:Average Selling Prices
ASSP
ASIC
Optoelectronics
Discrete
Analog
FPGA
MPU/MCU/DSP
Memory
Total Industry
TrendHealth
ASPs are mostly a function of capacity and competition.© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Business Outlook: IDM vs. Fabless
Clusters of fabless companies will compete in noncommodity markets Clusters of IDMs will compete in commodity markets Given a lower-cost structure, IDMs are likely to win when IDMs and fabless
IC companies compete in a product category IDMs will be more successful in markets with weak "intangible lock-in"
Fabless IDM
IP Defense Low-Cost Offense
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Digital is still hot!
Massive analog to digital TV shift starts in 2004, driven by low-cost DTV silicon
Disruptive/Emerging Opportunities:
Hi-Fi and stand-alone CD yielding to recordable DVD with Windows Media/MP3/SACD/DVD-Audio
UPnP in the living room
Media gateways make TVs a peripheral of the PC
Demand Outlook: Consumer Electronics
0
5
10
15
20
25
30
35
40
45
50
2002 2003 2004 2005 2006 2007
Analog (1% CAGR) Digital (16% CAGR)
Note: Percentages are CAGRs for 2002 through 2007.
Worldwide Consumer Semi. TAM ($B)
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Transition from CRT to LCD monitors
WLAN may fuel consumer PC purchases
Reduced outlook for PC sales in 2003 as PC upgrade cycle delayed
Disruptive/Emerging Opportunities:
SATA transition begins with Springdale
Dell's impact on the printer market
Enterprise PC market driven by
– Productivity, security and TCO
64-bit CPUs in the enterprise
Demand Outlook: Data Processing
0
20
40
60
80
100
120
2002 2003 2004 2005 2006 2007
Storage (6% CAGR) PCs (7% CAGR)
Others (10% CAGR)
Note: Percentages are CAGRs for 2002 through 2007.
Worldwide Data Proc. Semi. TAM ($B)
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No single dominant growth driver
China emerging as an important market for auto sales and production
Disruptive/Emerging Opportunities:
Adoption of telematics and GPS
New exhaust emission legislation in Europe (Euro IV) and United States (LEV II) driving growth in ECU
Mandatory smart air bag systems in United States starting in 2003, which will drive growth of image and position sensors
Demand Outlook: Automotive Electronics
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007
Remote/Keyless EntryOther AutomotiveGPS Navigation SystemsEngine Control UnitsDashboard Instrument ClusterClimate Control UnitAuto StereoAntilock Braking SystemAir Bags
Worldwide Automotive Semi. TAM ($B)
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Wireless– Economic and financial climate
continues to hold back 3G infrastructure market
– Mobile voice and data will exceed voice-only by 2004
Wired– Massive reduction in optical
component supply base– Gigabit Ethernet earns its wings
Emerging/Disruptive Opportunities: Wired
– ADSL2+ Wireless
– Shift of handset production to Asia/Pacific
– Intel’s 50M transistor theory– Wireless LAN and the Centrino effect
Demand Outlook: Communications
0
10
20
30
40
50
60
70
2002 2003 2004 2005 2006 2007
Wired (11% CAGR) Wireless (14% CAGR)
Note: Percentages are CAGRs for 2002 through 2007.
Worldwide Comm. Semi. TAM ($B)
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Conclusion:Tech Is Not Tapped Out
Same old, same oldMilitary/Aerospace
RFID supply chain revolution/aging populationIndustrial/Medical
Just two words … digital TVConsumer
Mostly driven by upgrade cycle; some emerging marketCompute
Audio is done, but here comes videoStorage
Growth in location-based services, in video and in dataWireless Comm.
Massive broadband growth, but massive problems stillWired Communications
Unprecedented explosion in automotive electronicsAutomotive
CommentVertical
Let’s look by vertical market
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Fab Capacity and Utilization:Triggers for Capital Spending
James HinesPrincipal Analyst
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Fab Capacity and Utilization:Key Issues
1. How will capacity and utilization change to meet growth in demand?
2. What role will foundries play in the recovery?
3. What is the outlook for capital equipment spending?
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Semiconductor Supply:Shifting From Inventory to Production
Unit Demand Improving– Package units shipped by year-end will exceed 2000
peak level– Silicon consumption increasing
Inventories Approaching Normal Level– Consuming excess inventories for past two years
Growing Demand Must Now Be Met by More Production– Increasing utilization of existing capacity– Ramp-up of new fab capacity
Worldwide Silicon Consumption Increasing
0
200
400
600
800
1,000
1,200
1,400
1Q00
2Q00
3Q00
4Q00
1Q01
2Q01
3Q01
4Q01
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
Millions of Square Inches of Silicon
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Increasing Utilization of Existing Capacity
Ratio of Silicon Consumed to Fab Capacity
40%
50%
60%
70%
80%
90%
100%
1Q00
2Q00
3Q00
4Q00
1Q01
2Q01
3Q01
4Q01
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
Leading-Edge
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0
5
10
15
20
25
30
35
40
45
50
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
300 mm
Non-300 mm
Number of New Fabs Starting Production
New Fabs in Place for Capacity Ramp-Up
24 2327
12
6
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Worldwide Wafer Fab Capacity
Capacity Growth on HoldSince 2000
– Two years of spending cuts– Attrition of older fabs
Slow Ramp-Up in 2003– Cautious investment
in 2003– Partially equipped fabs
in place Expansion in 2004 and 2005
– New fab projects – 300 mm drives growth
Fab Capacity Expansion Building Slowly
0
200
400
600
800
1,000
1,200
1,400
2000 2001 2002 2003 2004 2005 2006 2007
100 mm and Below 125 mm
150 mm 200 mm
300 mm
Millions of Square Inches of Silicon/Quarter
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Foundries Are Recovering
Foundries Have Been Hit Hard– Capacity utilization fell to nearly 40 percent in 2001– Prices and margins are under pressure
Wafer Demand Is Starting to Return– Wafer shipments are up 2 percent to 3 percent in
first quarter– Demand for leading-edge processes is strong– Forecast foundry revenue growth of 23 percent in 2003
Foundries Will Be Cautious on Capital Spending– Must manage profit vs. capacity expansion– Will modulate capacity ramp-up to keep pace
with demand
Foundry Fab Capacity Utilization
Ratio of Silicon Consumed to Fab Capacity
40%
50%
60%
70%
80%
90%
100%
1Q00
2Q00
3Q00
4Q00
1Q01
2Q01
3Q01
4Q01
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
Leading-Edge
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Optimistic PessimisticMost Likely
3
4
5
6
7
8
9
10
1Q00 3Q00 1Q01 3Q01 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04
Billions of Dollars2002
- -31.5%
Scenarios (Probability)
OptimisticMost LikelyPessimistic
2003
+16% (0.25) +8% (0.55) +1% (0.20)
Wafer Fab Equipment Market Forecast: Return to Growth in 2003
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What's Hot and What's Not in 2003?Selected Wafer Fab Equipment Segments
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000
ECD
Steppers
2003 Growth
2003 Revenue (Millions of Dollars)
Market GrowthTrack Dry EtchCMP Nontube
CVDPVD
Diffusion
RTP Implant
Process ControlWet
CleanFactory Automation
193-nm Steppers [~100%]
E- Beam Mask Lithography
0%
20%
40%
50%
60%
30%
10%
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0
5
10
15
20
25
30
35
40
45
1999 2001 2003 2005 2007
Billions of Dollars
0
10
20
30
40
50
60
70
1999 2001 2003 2005 2007
Capital Spending
Billions of Dollars
Semiconductor Equipment(Excluding Test)
Silicon Cycle Continues:Capital Equipment Boom in 2004 and 2005
<Client Name> | <Title> | Engagement: <xxxxxxxxx> | <Date>2Q03 Semiconductor Forecast Update
Entire contents © 2003 Gartner, Inc. All rights reserved. | Page 27
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Conclusions
Supply is shifting from inventory to production
Capacity utilization is improving, especially for leading-edge technologies
Foundries are recovering
Capital spending has stabilized and will grow7 percent in 2003
Capital equipment markets will boom in 2004 and 2005
Semiconductor Industryand Market Outlook, 2Q03Session 2
Richard GordonBryan LewisTom Starnes
Joe Byrne
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Semiconductor Device Forecast Update, 2Q03Session 2 Agenda
Semiconductor DeviceForecast Update ..………………………. Richard Gordon
Best-of-Breed SuppliersDominate ASIC/ASSP Market ...……………Bryan Lewis
Embedded Processors: The Key to Tomorrow's Applications ..……. Tom Starnes
Wireless LAN Breaks Outof the Beige Box ..……………………………… Joe Byrne
Semiconductor Device Forecast Update
Richard GordonResearch Vice President
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Semiconductor Device Forecast Update, 2Q03Key Issues
1. What is the status of the recovery in the semiconductor industry?
2. What is the medium- to long-term marketgrowth outlook?
Worldwide Semiconductor Forecast Update, 2Q03Unspectacular Recovery Continues
Overall improvement in demand expected to begin in the second half of 2003
Tightening supply will firm up device ASPsin 2004
Caveat … Lack of confidence in
end markets means poor order visibility and forecast uncertainty for semiconductor vendors
Timing/rate of next industry upcycle determines annual growth in 2003and 2004
0
10
20
30
40
50
60
1Q
02
2Q
02
3Q
02
4Q
02
1Q
03
2Q
03
3Q
03
4Q
03
1Q
04
2Q
04
3Q
04
4Q
04
5.7%6.3%
8.5% 2.5%-3.6% 1.2%
5.1%3.2% 2.2%
12.1%7.1%
4.4%Quarterly Sequential Growth
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Revenue (Billions of Dollars)
Worldwide Semiconductor Forecast Update, 2Q03: Market Size and AGRs by Device, 2002 and 2003
2003 Total Market = $168 BillionAGR by Device
13%
5%
10%
11%
2%
10%
6%
10%
0% 5% 10% 15%
Memory
Micro
Logic
Analog IC
Discrete
Opto
ASIC
ASSP
2002 Total Market = $155 BillionShare by Device
Memory18%ASSP
24%
Micro25%
Logic5%
Analog IC 6%
Discrete8%
Opto4%
ASIC10%
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0
50,000
100,000
150,000
200,000
250,000
2000 2001 2002 2003 2004 2005 2006 2007
ASSP
ASIC
Opto
Discrete
Analog IC
Logic
Micro
Memory
Worldwide Semiconductor Forecast Update, 2Q03: Cyclical Recovery Is Under Way
Application
Specific
General
Purpose
-31.2% 1.9%8.3%
23.1%
21.8%-5.2%
5.6%
Annual Growth
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Revenue (Millions of Dollars)
Best-of-Breed Suppliers Dominate ASIC/ASSP Market
Bryan LewisResearch Vice President and Chief Analyst
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ASIC, ASSP and FPGA:Key Issues
1. How are the markets for ASICs, ASSPs and FPGAs evolving?
2. Who are the leading ASIC and ASSP vendors?
3. What does it take to succeed in theASIC/ASSP market?
Vital Market Statistics: ASIC, ASSP and FPGA Market Growth Rates, 2002 and 2003
Total Semiconductor Market
1.6 percent AGR in 2002
8.3 percent AGR in 200310.3%
-12.2%
-4.0%
6.1%5.4%
14.3%
-15%
-10%
-5%
0%
5%
10%
15%
20%
2002 2003
ASIC
ASSP
FPGA/PLD
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Strong Growth on the Horizon
0
10
20
30
40
50
60
70
2001 2002 2003 2004 2005 2006 2007
ASIC
ASSP
FPGA/PLD
2002-2007CAGR (%)
ASIC ..………. 8.4%
ASSP .…….. 10.5%
FPGA/PLD .. 18.5%
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Revenue (Billions of Dollars)
0
2,000
4,000
6,000
8,000
10,000
12,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
ASIC
ASSP
-36%-17%
-12%-3%
Design Starts:Leading or Misleading Indicator
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Design Starts
Formula 1 Racing
Ferrari
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ASIC and ASSP Race Winners
ASSP
Intel
ST
Qualcomm
ASIC
ST
IBM
TI
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Microcomponent Memory Analog DiscreteOptoLogicMicrocomponents Memory Analog DiscreteOptoLogic
Microcontroller
Microprocessor
Microperipheral
DSP
Standard Logic
Full-Custom IC
FPGA/PLD
Gate Array
Cell-Based
LCD
Other Logic
ASICASIC
Total OtherTotal OtherLogicLogic
DRAM
SRAM
Nonvolatile
Other Memory
General-PurposeGeneral-PurposeAnalogAnalog
ASSP AnalogASSP Analog
Semiconductor
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Old Definition Family Tree
Communications
ASICASSP
ASICASSP
ASICASSP
ASICASSP
Industrial AutomotiveMilitary/
Aerospace
ASICASSP
ASICASSP
ASICASSP
DataProcessing
Wireless
Consumer
Wired
Memory
FPGA/PLDLCDStandard LogicOther Logic
Logic Analog Opto Discrete
DRAMSRAMNonvolatileOther Memory
MicroprocessorMicrocontrollerDSP
Microcomponents
Application-Specific Devices
GeneralPurpose
Semiconductor
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New Definition Family Tree
Top 10 ASIC Suppliers: 2002
0.0 0.5 1.0 1.5 2.0 2.5
Sony
Philips
Toshiba
LSI Logic
Fujitsu
Agere
NEC
TI
ST
IBM
Revenue (Billions of Dollars)
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Top 10 ASSP Suppliers: 2002
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Sanyo
Toshiba
Motorola
TI
Infineon
Nvidia
Philips
Qualcomm
Intel
ST
Revenue (Billions of Dollars)
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Top 10 ASSP Suppliers, 2002:Data Processing
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6
Marvell
Broadcom
TI
MediaTek
SIS
ATI
VIA
ST
Nvidia
Intel
Revenue (Billions of Dollars)
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Characteristics of ASIC and ASSPMarket Leaders
All have the largest R&D budgets
All have economies of scale
All have a vertical market focus
All have leading-edge system knowledge
Many have in-house leading-edge manufacturing
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Conclusions:ASIC and ASSP Market
Each large, mature market generally supports only two or three suppliers
R&D budgets and economies of scale playkey roles
The worst is behind us and the market rebound has started
The ASIC market is not dead
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ASIC and ASSP Supplier Recommendations
Focus on a specific vertical market
Invest in system knowledge
Know your value proposition
Own a vertical market or submarket
Small companies should find a niche in which they can dominate and grow
Embedded Processors:The Key to Tomorrow's Applications
Tom StarnesResearch Vice President
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Embedded Processors:Key Issue
1. How will new product features drive the market for next-generation embedded processors?
Microcomponent Chips:Programmable Processors
Microprocessors (MPUs)
Microcontrollers (MCUs)
Digital Signal Processor (DSP)
Compute
Embedded
4- and 8-Bit
16-Bit
32-Bit
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Programmable Processors:Permeate Semiconductor Chips
Microprocessors (MPUs)
Microcontrollers (MCUs)
Digital Signal Processor (DSP)
CustomerLogic
Application-Specific Integrated Circuit
(ASIC)Application
Logic
Application-SpecificStandard Product
(ASSP)
MPU MCU DSPMPU MCU DSPMPU MCU DSP
Processor Complex
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Flexibility: Why Processors Are Invaluable
Possibilities A processor for any task
Availability Also integrate into SOC
Versatility Software programs
Upgradability Correct, upgrade, extend
Greatly Reduced Risk
Embedded MPU
4- and 8-Bit MCU
16-Bit MCU
32-Bit MCU
DSP
0
5
10
15
20
25
30
35
40
2001 2002 2003 2004 2005 2006 2007
($B) Embedded Processor, 2002-2007 CAGR = 10.9%
(Compute MPU Does Not Add to Other Devices)
CPU
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The $25 Billion Embedded Micro MarketHosts Many Vendors and Many Applications
Embedded Micro Vendors SucceedWith MCU and DSP
1
2
3
Motorola T I Hitachi NEC Mitsubishi
DSP
MCU
Embedded MPU
($B)2002 Total Market: $17.1 Billion
Toshiba
Renesas1+1=2
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MPU DSP
Flash SRAM
GSM/GPRS
Integrate … Integrate … Integrate
System-on-a-Chip
System-in-a-Package
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Intel Gets Into Embedded MarketWith Both Feet
Embedded Processor Cores: Implementation Options Vary
ZSP
TI
PowerPC
MIPS
ARM
General- ASSP ASIC PLD Foundry Purpose
From "Off the Shelf" to "Roll Your Own"
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Many Complex Characteristicsof Processors
8-Bit 16-Bit 32-Bit 64-Bit
Integer Arithmetic, Logic, Control, Addressing
Floating Point
Accelerators
Multilevel Cache
Memory Management
RISC, VLIW
Prediction
Superscalar
Performance
Compressed Instructions
Cores, Synthesizable
Configurable
Java
Signal Processing
Vector, SIMD
Network
Media
Security
. . .
All Impact Processor Applicability to a Given End Equipment
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Features for the Future
To Address Upcoming Needs ...
Multiple cores Configurable and
reconfigurable Multichip packaging Analog Low power
… and the Usual
Architecture Integration Performance Application Network Flash
Independent Benchmarks Expose Reality
MHz, MIPS, Dhrystones — Poor
EEMBC — Very good
BDTI — Excellent DSP
Power —
But Only a Technical Comparison
CR2032Coin Battery
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Comparative Shopping
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Support Determines the Winners
Support Is Critical — Never Underestimate This!
Development tools — Compilers, emulators
Operating systems, algorithms, standards, drivers
Complete application programs
Reference design, chipsets, licenses, manufacture
Partners, third parties, "ecosystem"
All — Specific to the application
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Conclusions and Recommendations
Processors permeate semiconductors
The market continues to mature, but "cores," SOC and SIP are the future
Watch Intel
Support outweighs technology
Wireless LAN Breaks Out
Joseph ByrnePrincipal Analyst
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Wireless LAN Chip Suppliers:Key Issues
1. How is the market for WLAN chips evolving?
2. How can WLAN suppliers survive in an intensely competitive landscape?
3. Where are the WLAN opportunities outside the PC space?
WLAN Chipset Market Share Ranking, 2002
2002Supplier 2001 2002 AGR Share
Intersil 120 225 88% 51%
Agere 50 110 120% 25%
RF Micro Devices 0 25 NA 6%
Texas Instruments 1 20 1,900% 5%
Atheros Communications 5 17 240% 4%
Atmel 7 15 114% 3%
Philips 20 13 -35% 3%
Broadcom 0 11 NA 3%
Total 203 436 115% 100%
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Revenue ($M)
Revenue ($M)
Brutal Competitive Landscape
Power Amplifier
RF
Baseband/MAC
5.0GHz
2.4GHz
Mix of Technology Expertise Among Suppliers
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Suppliers Span the Entire Spectrum
Sixty would-be competitors; 40 percent are established semiconductor suppliers
Incumbents: Intersil, Agere, Atheros, etc.
Large recent entrants: AMD, Intel, TI, Broadcom, etc.
Smaller recent entrants: RFMD, Marvell, etc.
Taiwanese: ADMtek, Realtek, etc.
Startups: (Airoha, Bermai, Cognio, Envara, IceFyre, Synad, etc.)
Four Survival Strategiesfor WLAN Chip Suppliers
Leverage
Microprocessor PC core logic chipset DSL/cable transceiver Cellular (?)
Best Buddies
"You do the MAC/baseband … … I'll do the RF"
Living on Air
"Margins?""We don’t need no stinking margins!"
Marketing Presence/Incumbency
Established WLAN suppliers Established wired LAN suppliers Large chip companies
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Two Popular (but Risky) Survival Strategies
Technology to the Rescue
Better Faster Stronger
Star Trek
"To boldly go where no man has gone before"
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Technological StrategiesWill Not Be Enough
Technology Goals
Range/throughput extension
Density improvement
Power dissipation reduction
Cost reduction
Features (for example, QOS)
Technology's Shortcoming
In contests between superior and good enough, good enough wins
10x improvements are required
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For Volumes to Continue to Grow, WLAN Needs to Transcend PC Market
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2001 2002 2003 2004 2005 2006 2007
Smartphone
Consumer Electronics
BBR — Upside
Broadband Router
PDA
Access Point
PC Adapter
Chipsets Shipped (Thousands)
Potential Contribution of Various Product Markets to Overall WLAN Chip Shipments
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Falling Chipset Prices Will SuppressRevenue Growth and Profits
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2001 2002 2003 2004 2005 2006 2007
0
100
200
300
400
500
600
700
800
Chipset Unit Shipments
Chipset Revenue
Chipsets Shipped (K) Chipset Revenue ($M)
"WLAN Chip Shipment Growth
Outstrips Revenue Growth"
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Conclusion:WLAN Chipset Market Will Be a Mess
Multitude of Winning Survival Strategies MeansMultiple Survivors– Competition will force prices lower
"Leverage" Strategy Means WLAN Chipset Profitability Is Secondary
Biggest Markets Have Yet to (and May Never) Materialize– Cellular and consumer electronics are uncertain target markets– Companies that miss out on PC-driven boom must either invest
in redesigning their products to serve other markets or give up on trying to develop WLAN products altogether
Semiconductor Industryand Market Outlook, 2Q03Summary
Jeremey Donovan
Improved Market Conditions Hingeon the Demand Side
Demand Macro Factors
Consumer confidence Enterprise IT expenditure Carrier capital expenditure
Supply Macro Factors Process technology IDM vs. fabless Intellectual property
Fab Capacity and Utilization Capacity utilization is improving, especially for leading edge
Average Selling PricesPrice pressure remains because of excess capacity, although the situation is improving
Applications
WLAN is exploding but massively oversupplied Excitement concentrated in digital consumer and automotive
Devices
ASIC/ASSP/FPGA: Demand for ASICs remains, but high growth opportunity is in FPGAs
MPU/MCU/DSP: Embedded processor cores becoming ubiquitous
Semiconductor InventoryExcess inventory is no longer a problem; shortages may appear
© 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
Why Settle for Anything Less?
Gartner Facts:Forty-eight semiconductor analysts in nine locations Coverage of vertical equipment and device marketsCoverage of semiconductor manufacturingContinuous semiconductor coverage since 1975Total of 1,200 research analysts and consultants in 90 locationsA stable and profitable public company with about $900 million revenue in 2002