8 January 2010


Handset semiconductor sales rebound in Q4/09

In 2009, connectivity chips showed the greatest growth within the mobile phone semiconductor market, according to the report ‘Mobile Device Semiconductors Market Data’ from ABI Research. Total revenue for handset Bluetooth, GPS, and WLAN (wireless local-area networks) is forecasted to grow 16% in 2009 to more than $1.9bn, and then to increase at a compound annual growth rate (CAGR) of 11% between 2009 and 2014.

“There has been a shift in balance within the mobile handset semiconductor market since 2008,” says industry analyst Celia Bo. “Suppliers are feeling the impact of the uncertain macroeconomic environment, design win shifts, acquisitions and collaborations.”

Major semiconductor components such as baseband processors (which account for over 50% of revenue in this segment) fell 9.6% from 2008; declines in mobile phone shipments as well as average selling prices (ASP) have both contributed in the drop in revenue due to the uncertain economic conditions. Application processors managed a moderate gain, while radio-frequency products fell in line with the overall market.

Signs showing a rebound in handset shipments in fourth-quarter 2009 indicate that the handset semiconductor market started to recover in the third quarter, and that revenue is expected to increase 3–8% over the next three year. The key driving force for connectivity chip penetration in mobile handsets is rising consumer demand for advanced functions, which comprised the biggest growth segment in the mobile phone semiconductors sector.

According to ABI Research, Bluetooth has the highest attach rate compared to other connectivity types: the average penetration rate is expected to be 60% in 2014. GPS devices have secured a solid position in the automotive segment and are gaining traction in mobile phones too; the penetration rate is expected to be 21% this year, and 47% in 2011. The revenue increase for Wi-Fi chips is shown be the highest among the three connectivity chips over the next five years, with a CAGR of 23.7%.

See related item:

Power amplifier market on track for $2.8bn at 4bn units in 2014

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