DTV and MP3 devices drive chip demand — IDC

4 Oct 2006

The two hottest consumer markets worldwide, digital television (DTV) and portable media players, are expected to drive a major surge in growth in the semiconductor market, new research suggests.

According to IDC, the DTV semiconductor market is expected to grow worldwide at a compound annual growth rate (CAGR) of 18pc and reach US$7.7bn in 2010.

The compressed audio and portable media player market will grow at an even faster CAGR of 28pc and pass the US$8bn mark in 2010.

“The DTV market is emerging very quickly, driven by the rapid consumer adoption of flat-screen televisions, especially LCD,” said IdaRose Sylvester, senior analyst for IDC’s consumer semiconductor program.

“Additionally, worldwide digital tuner mandates push more silicon content into the TV, increasing the opportunity for chip vendors. However, the market is exceptionally competitive, and vertically integrated companies still dominate.”

Sylvester continued: “The compressed audio and PMP semiconductor market saw explosive growth in 2005 and continues to grow rapidly in 2006 due to a confluence of unique factors, skyrocketing the segment to the largest in the consumer semiconductor forecast.

“Despite challenges, this market represents substantial opportunity for the chip vendors playing in it if they play the right tune,” said Sylvestor.

Another body of research, this time from a consultancy focused exclusively on the semiconductor business, DRAMexChange pointed to a rise in prices for flash memory in Asia.

According to a briefing note, alongside Apple and SanDisk’s respective launch of high-density MP3 players (6GB to 8GB density) during the third quarter, 8GB and 16GB have become the hottest commodities in the memory market.

An insufficient supply was reflected in the persistent price upward trend and 16GB memory enjoyed a 3.7pc gain last week and closed on Monday at US$35.75 a part.

By John Kennedy