January 19, 2009
In-Stat Report: Cellular Base Station Chip Makers Face Declining Demand
By Narayan Bhat, TMCnet Contributing Editor
Global economic recession has slowed down the sale of base station equipment, so the makers of semiconductors used in these gears may have to wait for nearly three more years to see a jumpstart in their business, says market research firm
In-Stat.
Base station semiconductor revenue will decline an average of 12.3% per year from 2008–2012, the high-tech market research firm said in its latest research
report titled “A Tough road Ahead for Base Station Components—Worldwide Semiconductor Forecast.”
“Many operators have spent heavily on 3G upgrades and they are now waiting for service revenues from these networks before they invest more,” says Allen Nogee, In-Stat (
News -
Alert) analyst.
“In addition, the number of subscribers in many areas is reaching saturation, with former double-digit subscriber growth now running in the mid-to-low single-digits,” he added.
In an attempt to weather the global economic storm, operators may rather choose to enhance the performance of existing base stations using new kinds of remotely adjustable mobile antennas rather than replace them with new ones.
According to analysts, revenue from W-CDMA may still continue to grow, but overall base station microchips are in a steep declining market.
“Although most people aren’t likely to part with their cell phones, they may replace them less often, and reduce services they don’t find value in or can’t afford,” the analyst reasoned.
Therefore, the road ahead is likely to be tough for those producing base-station equipment and semiconductors. Things may worsen for weaker companies, says In-Stat. Those who are poorly positioned are less likely to survive.
Recent research by In-Stat found the following:
- The slowing worldwide economy is having wide-ranging negative effects on all regions, with the possible exception of Africa.
- Base station semiconductor revenue will drop from $7.2 billion in 2007 to $4.6 billion in 2008.
- Of the main technology types, WCDMA is the only technology expected to yield semiconductor revenue growth between 2008 and 2012.
Narayan Bhat is a contributing editor for TMCnet. To read more of Narayan's articles, please visit his columnist page.Edited by
Jessica Kostek(source: http://www.tmcnet.com/voip/ip-communications/articles/48929-in-stat-report-cellular-base-station-chip-makers.htm)
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