[December 8, 2004]

VoIP Semiconductor Market to Reach $1.7 Billion by 2008

BY JOHANNE TORRES

According to IDC's new study, Worldwide VoIP Semiconductor 2004-2008 Forecast and Analysis, the worldwide VoIP (define - news - alert) semiconductor market is expected to reach $1.7 billion by 2008. The study reveals that this market has grown significantly since more and more service providers are seeing the benefits of deploying packetized voice for business and consumer use.

The research firm says that accelerated VoIP adoption across all system segments will enable the semiconductor market to reach $1.7 billion by 2008, with a compound annual growth rate of 48 percent compound annual growth rate (CAGR) for 2003-2008. The study reveals that within the semiconductor market, the broadband gateway segment targeting consumers will drive the strongest increase as DSL and cable modem customer premise equipment increasingly integrates VoIP functions.

"The transition to VoIP is well under way, with sales rising steadily for media gateways and softswitches within service providers, IP PBXs and IP phones within businesses, and broadband gateways within small businesses and consumer segments," said Sean Lavey, program manager for Semiconductor Research at IDC. "The semiconductor vendors building products that run at the heart of these designs will benefit from this migration, especially as standards continue to mature."

The study tells vendors how to make the idea of switching to VoIP a reality. According to IDC, semiconductor vendors will need to show OEMs that they are working toward lowering costs in future designs and delivering more than just a highly integrated chip product. IDC believes turnkey solutions bundled with some key underlying software will be an important deliverable to showcase to help OEMs build solutions much faster than ever before.

IDC's study examined voice processing-specific semiconductors within VoIP end markets, including digital signal processors (DSPs), ASSP/ASICs, PLDs, and related analog components (SLICs and SLACs) that are responsible for the termination and conversion of traditional POTS voice traffic into IP packets and vice versa. The research firm presents a forecast for the semiconductors used within VoIP systems, segmented out by key end markets for 2003-2008.

IDC
www.idc.com