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Communications Still Integral to Semiconductor Industry

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SCOTTSDALE, Ariz., July 9 -- Despite the "bursting of the bubble" in 2001, communications is still a major market for semiconductors, according to a report by In-Stat/MDR. The high-tech market research firm reports that communications is still the second largest major segment of the semiconductor market, with a 20.5 percent share in 2002; it expects it to gain share in 2003 and continue to do so over the long term.

"The market for wide-area network (WAN) products has slowed more than most other segments of the communications market because of the large excess capacity that was purchased and installed during the boom years," said Steve Cullen, a director with In-Stat/MDR. "The existence of this excess capacity has allowed service providers, who constitute a large part of the WAN equipment market, to cope with today's economic realities by cutting back dramatically on capital spending, without seriously hurting their ability to serve their current level of customer demand."

As the recovery develops, the markets for some equipment products will grow faster than others. A major driver is expected to be the ongoing transition from traditional circuit switched transmission to packetized transmission. Media gateways, IP service switches and low-end routers are expected to see the fastest growth over the following five years, while markets for products such as core routers and DSLAMs (digital subscriber line access multiplexers) are expected to experience little or no growth, In-Stat said.

For information about the report, visit:
Jul 2003
CommunicationsindustrialNews & Features

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