PALO ALTO, Calif.--(BUSINESS WIRE)--May 4, 2005--Manufacturers of radio frequency (RF) semiconductors are in a quandary over the robust and persistent demand for compact, cost-effective, and power efficient solutions. To meet the requirements specified by handset manufacturers, they strive to design, develop, and deliver high-performance devices - in very short periods - to stay afloat in an intensely competitive market.
New analysis from Frost & Sullivan (http://www.semiconductors.frost.com), Strategic Analysis of World Handset RF Semiconductor Markets reveals that revenue in this market totaled $5.34 billion in 2004 and projects to reach $8.27 billion in 2008.
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To provide the desired solution, the semiconductor suppliers need to adopt sophisticated technology and incorporate additional functionalities into their products. Simultaneously, they have to keep costs under control as the market is highly cost-competitive, and the price-performance ratio can be a key differentiator.
"RF semiconductor companies will have to design devices that improve the talk time, power characteristics, and overall performance of the RF section in handsets and support high integration levels that shall enable the creation of single chip radios and integration of RF and baseband in the future," says Frost & Sullivan Industry Analyst Deepa Doraiswamy. "RF companies are under pressure to invest heavily in process technologies and design mechanisms that make it possible to develop such solutions."
There is constant technological progress in the handset RF semiconductor market and designers in the market are compelled to upgrade their products or migrate to newer and updated manufacturing techniques. Many companies have started investing heavily in R&D to cope with the technology churn.
Another significant area of concern for RF semiconductor manufacturers is the need to keep pace with the reduced design cycles of handsets.
As handset vendors are the end-users, this compressed design cycle forces RF semiconductor manufacturers keep up with the handset manufacturers.
"Since competition and customer expectations will continue to increase, the design cycles of handsets could also shrink further," notes Doraiswamy. "RF semiconductor manufacturers need to develop scalable solutions with advanced power control features and interfaces to varied functionality."
Such broad changes are crucial in the mature and intensely competitive RF semiconductor market for handsets. The filters and switch markets are almost saturated and currently, only a few companies dominate the market.
This situation makes it difficult for small companies entering the market to establish themselves or even gain a foothold, as handset manufacturers are not inclined to buy from a start-up company.
"However, there is some scope in the power amplifier and RF transceiver markets, where radical technological innovations are appreciated," observes Doraiswamy. "An emerging company with a groundbreaking technology can make significant inroads into these markets, provided the gestation period for its technology is short."
Strategic Analysis of World Handset RF Semiconductor Markets, part of the Semiconductors Subscription (9952), provides an overview of the related market. The market has been segmented into RF switch, filters (RF filters, IF filters, duplexers), power amplifier, and transceiver. It also discusses the market drivers and restraints as well as industry challenges and provides recommendations to overcome them. The research enables companies to align their positioning strategies to benefit from the changing markets and obtain maximum return on investment. Executive summaries and interviews are available to the press.
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