Microwave Engineering Europe - November 2007 - (Page 10)

10 NEWS By JP Joosting, Microwave Engineering Europe IN BRIEF AWR and NXP release LDMOS simulation library Applied Wave Research has released a Microwave Ofﬁce 2007 design software simulation library that features NXP Semiconductor’s sixthgeneration laterally-diffused metal oxide semiconductor (LDMOS) devices. The simulation library provides power ampliﬁer (PA) and base station design engineers, as well as designers of worldwide interoperability for microwave access (WiMAX) and wireless broadcasting equipment with AWR- and NXP-proven large signal circuit simulation models. www.appwave.com www.nxp.com Consolidation strikes the mobile handset baseband semiconductor market As the mobile-handset market goes, so goes the mobile-handset semiconductor market — and right now both areas are going through a period of consolidation that may lead to a signiﬁcant winnowing of baseband chip suppliers, according to iSuppli Corp. In wireless handsets, numerous smaller players headquartered in China have exited the business during the past few years. This, coupled with the bankruptcy of BenQ-Siemens, has led to an increasing concentration of market share among the Top-5 mobile-handset OEMs. In 2006, the Top-5 OEMs accounted for 83 percent of global mobile-handset unit shipments, up from 75.6 percent in 2005. This has led to declining opportunities for mobile-handset baseband semiconductor suppliers. “Quite a few baseband semiconductor suppliers are now battling for sockets at a dwindling number of handset OEMs,” said Derek Lidow, president and chief executive ofﬁcer of iSuppli. “With a smaller number of handset OEMs accounting for an overwhelming portion of sales, opportunities for baseband IC suppliers are getting more difﬁcult to come by.” Meanwhile, the overall mobile-handset market is experiencing decelerating growth. After rising by 20.1 percent in 2006, growth in worldwide mobile-handset unit shipments is expected to slow to 13.1 percent in 2007 and then to 11.6 percent in 2008, according to iSuppli. The annual growth rate will continue to decelerate during the following years as the mobile-handset market becomes more mature due to high penetration rates in the world’s developed regions. This, combined with a slowdown in handset shipment growth, has led to a deceleration in the growth of the mobile-handset baseband IC market. After rising by 14.1 percent in 2006, global revenue growth will slow to low singledigit percentages in 2007. Consolidation strikes Signs of the stresses being exerted on the baseband semiconductor suppliers are appearing as growth opportunities become harder to ﬁnd. Consequently, staying competitive in the race to supply the ﬁve leading OEMs requires increased levels of capital, capability and innovation. In August, the ranks of baseband suppliers was reduced by one as LSI Logic Corp. announced it would sell off its mobility products business unit to Inﬁneon Technologies AG. And in September the number of baseband suppliers was further reduced when MediaTek Inc. purchased Analog Devices Inc.’s baseband chip product line. Another example is STMicroelectronics, the leading supplier of analog handset baseband semiconductors, which has struggled in recent quarters as its revenue growth has stalled. The company achieved revenue of $197 million in the second quarter of 2007, down 10.5 percent from $220 million in the second quarter of 2006. STMicroelectronics recently was the recipient of a “gift” of 200 engineers from customer Nokia, a gift intended to maintain STMicroelectronics as a viable baseband supplier. This has left the baseband IC business with a handful of players with annual revenues of or on pace to be in the $1 billion range: Qualcomm, Texas Instruments, MediaTek and Freescale Semiconductor. This shows that as the mobile handset market is consolidating into a small number of large players, so too is the mobile handset semiconductor space. Cost pressures Beyond customer consolidation, baseband chip suppliers face another challenge: rising costs. With mobile handsets continuing to add features, baseband IC chips are becoming more expensive to develop. Only a few companies have the margins to maintain development costs in this area. “If a company is doing $1 billion in annual revenue and only making a 25 percent gross margin, it doesn’t have enough money for an enormous R&D team,” Lidow said. “We can see in the ﬁnancial results of some of the smaller suppliers among the top-tier players that they are getting squeezed by these costs.” This dynamic is likely to further consolidate market share, resulting in a small number of large-sized baseband suppliers. Tough choices It’s clear that the baseband market cannot support all the current players. However, how many players will be left when the current phase of consolidation is over is unclear. Unless one of the top-tier players buys another supplier of equal size, there’s no one else left to buy. This may set the stage for internecine war among existing players, leading to consolidation. “There’s a clash of titans looming,” Lidow warned. www.isuppli.com Castle Microwave in distribution deal with C-MAC MicroTechnology Castle Microwave is to distribute in the European market the range of hybrid microelectronics chips and modules made by C-MAC MicroTechnology. Castle Microwave (Newbury, England) said the Ku Band PA and LNA modules from C-MAC (Woburn Green, England) — designed for use in the 12 GHz to 18 GHz frequency range — will be an important addition to its range. The companies say the enhanced access to European-produced components, modules and subassemblies the partnership will enable is particularly relevant for European designers and manufacturers suffering from procurement issues due to the International Trafﬁc in Arms Regulations (ITAR). ITAR restricts the availability of U.S. manufactured product to non-U.S companies. C-MAC has a long history of working directly with U.S.-based companies and competing on an equal footing aided by its MIL-PRF38534 Class H and Class K (space) qualiﬁcation. This partnership will help secure a reliable supply chain and obtain products which are no longer readily available to many European companies. www.cmac.com www.castlemicrowave.com Microwave Engineering Europe ● November 2007 ● www.mwee.com 010_MWEE.indd 10 26/10/07 11:05:49 http://www.appwave.com http://www.nxp.com http://www.cmac.com http://www.isuppli.com http://www.castlemicrowave.com http://www.mwee.com

Table of Contents Feed for the Digital Edition of Microwave Engineering Europe - November 2007

Microwave Engineering Europe - November 2007 Contents News Comment Metamaterials: Metamaterials Tackle Communications Wavelengths Microwave Components — EM tools: Microwave Component Design Easier With New EM and EDA Tools Cover Feature: RF Testing for OFDMA in LTE Base-Stations Startup Eyes Battery-Free Wireless Sensor Nets High-speed ADC Technology Paves the Way for Software Defined Radios Planning a WiMAX network: Maximising the ROI by Using Advanced Optimisation Tools Transporting Video Over Wireless Networks Ultrawideband Under the Gun Specifying the Proper SAW Filter Products Product Feature: RF Test Solution Supports Emerging 4x4 MIMO as Well as Multiple Commercial Standards Calendar

Microwave Engineering Europe - November 2007

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