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26 March 2008


Cellular/3G market forecast to decline at a CAGR of nearly 8% over next four years

According to a report by market analysts at ABI Research, the decline of cellular/3G will have a negative impact on the RF power semiconductor device market. The firm says that the market below 4 GHz is comprised of six major segments: wireless infrastructure, military, ISM (Industrial / Scientific / Medical), broadcast, commercial avionics, and non-cellular communications.

"Wireless infrastructure represents the largest segment for RF power semiconductors, and it contains the largest sub-segment: cellular/3G," says research director Lance Wilson. "But cellular/3G is in a sense a long-term market anomaly that is now in a decline which will continue steadily over the next five years."

ABI says that increasingly efficient air interfaces, along with falling average selling prices and the build-out of the infrastructure base, are driving cellular/3G revenue down. Furthermore, on the device side, wide-scale adoption of plastic packages is also reducing revenue. Between 2007-2012, ABI forecasts that cellular/3G revenues will decline at a compound annual growth rate (CAGR) of nearly 8%.

"WiMAX, another sub-segment within wireless infrastructure, remains controversial," adds Wilson. "Although fixed WiMAX is deploying, mobile WiMAX (802.16e) is in a state of flux from a high-power standpoint. There is a potential large upside to mobile WiMAX, but there are no guarantees that this will actually occur in a wide sense.”

Despite the possibilities for mobile WiMAX, ABI anticipates that the overall wireless infrastructure segment will decline by a CAGR of 2% between 2007-2012.

ABI concludes that the entire market will exhibit a five-year growth rate of only 2.9%, as a result of cellular/3G decline. Nevertheless, the remaining major segments show a healthy CAGR over the 2007-2012 forecast period of 9.5%, with the military and ISM segments performing best.

See related item:

RF power semi market to near $1bn in 2012, with non-wireless-infrastructure markets taking up slack

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