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Growth returns to base station chip market

A new report from market analyst IDC says that the base station chip market will be worth $1.9 billion this year.

The market for semiconductor chips used in wireless base stations is finally growing again.

That’s according to a new report from the US-based market analyst IDC.

Its study suggests that the market, which includes baseband, transceiver and power amplifier (PA) products, will grow from $1.9 billion this year to $2.4 billion in 2008.

Not surprisingly, the introduction of 3G services is expected to drive most of this growth.

IDC predicts that the 3G segment, which includes W-CDMA, CDMA2000 and the up-coming TD-SCDMA standards, will generate annual growth of 28% in base station chip revenues over the next four years as existing networks are upgraded.

Additional growth is expected as demand for basic voice services in other parts of the world increases.

“We believe that further cost reductions delivered at the chip level for key baseband, transceiver and PA subsystems will jump-start expansion and upgrades to data-enabled cellular networks,” said IDC program manager Sean Lavey.

He cited increased standardization activity and a migration to “off-the-shelf chip approaches” as the major trends to follow in the base station market.

"With standardization trends continuing in the market, we believe that semiconductor vendors will now have a larger role to play in helping OEMs deliver lower costs per channel in their 3G designs," Lavey said.

The 35-page report, Worldwide Base Station Semiconductor 2004-2008 Forecast and Analysis, is available from IDC for $4500.

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