There is no doubt that 2002 was a tough year, tougher than many predicted at this time last year. Since it is painful to reflect on how the semiconductor and electronics industry performed financially, let's not and leave that to the myriad of experts more qualified than myself to examine the all reasons. Instead, let us pick our collective selves up and peer into the near future, to see what we can see.
My crystal ball happens to have a few cracks in it. For this reason I'd like to narrow the focus of my predictions to my editorial beat - the Analog Avenue and Wireless Knowledge Centers. Let me also say that these are just observations from where I sit, and nothing more. I'll start by examining some of the general trends and then I'll dig a little deeper to analyze what effects those trends might have on specific developments in the analog and wireless worlds. However, I do wish to remind you that I don't claim to have the best crystal ball and sometimes I tend to look forward with my eyes squarely fixed on the rear-view mirror. Please let me know if I'm off course by sending your thoughts to poshea@cmp.com.
Altitude Sickness
What are the trends, the driving forces that show promise for the analog and wireless engineers? Although a view from 100,000 feet can make you a bit queasy, it may help you see how the high swirling winds of future trends will affect the ground-level chip designs.
There's no doubt that the mobile business and consumer markets are driving many new designs and much of that includes wireless applications. Another trend showing up on the high-level Doppler radar is the move toward more graphics at higher resolution. Both these trends have significant impact on a variety of circuit designs, including those pushing for lower power, power management, power conversion, better sensors, switching regulators, audio control, video processing, display drivers, line drivers, transceivers, optoelectronic devices, and RF components and modules.
Wireless
Wireless technology is one of the leaders for next year's products (again) and will continue to push design companies to make their products smaller, integrate more circuits, make them less power hungry and better able to communicate with multiple wireless standards. I expect to see more integration and improvements in wireless designs that move the cost of implementing a Bluetooth design below the magic $4 level. I know some companies like TI have already offered Bluetooth designs, which easily meet that challenge. However more companies will follow the example, making this a very competitive field.
According to IDC there will be widespread adoption of Bluetooth in 2003. The largest segment will be cellular handsets with 51% of Bluetooth revenues in 2006. In another report, Phoenix-based Micrologic Research forecasts that 35.3 million Bluetooth chip sets will ship this year, down 45.4 million units that the company had earlier predicted for 2002.
All the market studies indicate that people want to be connected and they want it to be easy. We want easy access to wireless bandwidth and even wearable devices. Studies also indicate that the next level of devices should take advantage of knowing a user's physical location (global positioning capabilities) and even the ability to use what's called an electronic wallet or e-wallet to make everyday purchases (see ChipCenter editorial. Placing these communications capabilities directly on the chip will enhance communications between items, people and remote systems. This is a technology waiting to happen and the prices of the various components will drop precipitously in the near future.
Sensors
The organic light emitting display (OLED) market will see its revenue jump from $85 million in 2002 to $3 billion by 2007, capturing more than a 4 percent share of the FPD market, according to a recent report from researcher DisplaySearch. Specifically, the report predicts that five applications -- mobile phones, mobile phone sub displays, PDAs, digital cameras and camcorders -- will account for most of the growth. The report further forecasts that active matrix OLEDs (AMOLED) will gather a 30 percent to 40 percent market share in selected applications, and that in the next 12 months at least four major AMOLED fabs are expected to begin production. The research company additionally predicts that it will also compete against active matrix LCDs in selected markets. This is good news and will impact the ancillary products including the sensors, converters and power support chips.
Another booming market that hasn't been covered specifically by the Analog Avenue or Wireless Knowledge Centers is the world of microelectromechanical systems (MEMS). Yet, this field will affect designs for RF and power designs. There are predictions for RF MEMS and wireless MEMS to experience a high 30% compound annual growth rate through 2006. This will affect cell phones, cars and even industrial processing and condition monitoring markets. We can expect the MEMS market to affect switches/relays, filters, and inductors. Wireless MEMS will affect sensors with a big push from the automotive industry's request for tire pressure monitoring sensors.
The optical components market will finally see growth again in 2003, with a 30% year-over-year increase in dollar volume, according to market researcher, Strategies Unlimited, located in Mountain View, CA. They predict that by 2003, inventory burn off will finally be complete and growth is expected to resume, albeit, well below the peak levels of 2000. However, many companies have left this industry over the past couple years and the survivors should expect some return on their investments.
The research company iSuppli Corp. states that the prolonged downturn in the communications industry continues to suppress the market for optical components. Following a 48% contraction in 2001, the wired communications market for optical components will decline by an additional 45% in 2002. After hitting bottom in 2003, the optical components market will start to grow slowly and experience single digit growth through 2006.
The communications market which is driven by broadband, wireless, and other sectors, is projected by some to show a modest upturn in 2003. These projections are for a worldwide upturn in the communications chip market, mostly in the broadband and wireless sectors. That's great news for an industry that was reeling, according to Dataquest, from an almost 38% decline in 2001 from the previous year. Estimates indicate that 2002 was a flat year compared to 2001, so the up tick in 2003 will be a welcomed relief for many manufacturers.
Standards committees also have an effect on designs and manufacturing. For example, the Wireless Ethernet Compatibility Alliance (WECA) has decided to designate all products meeting the 802.11a, 802.11b and 802.11g specifications as "certified", as well as multimode solutions of the IEEE 802.11 standard. WECA, a nonprofit organization founded by WLAN equipment and chip set vendors to certify interoperability of Wi-Fi products, has yet to go public with an announcement of the certification program. But an internal document obtained by ChipCenter's sister magazine, EE Times, shows that under a new plan WECA intends to slap a single, unified logo on both the 5-GHz 802.11a and 2.4-GHz 802.11b products. The group had originally intended to establish separate certifications for the two radio types. WECA will no longer distinguish between "Wi-Fi" (.11b) and "Wi-Fi5" (.11a). Packages displaying the new "Wi-Fi Certified" logo will need to add a label indicating which category the product falls into - 802.11a or 802.11b.
Video
IC vendors designing video compression chips face the challenge of keeping pace with the new standards proliferating on the market. Changes in a standard could make your video chip useless.
However, MPEG-2 video and MPEG-4 video standards are both very much alive with neither showing signs of giving in to the other as the pre-eminent video coding standard. Some say they will remain separate, with MPEG-4 used in hand-held video devices as a result of its superior compression. Regardless of how this unfolds this market will continue to boom, providing ample opportunities for designers of display drivers, tuners, processors, transceiver, and others.
iSuppli predicts that the digital tuner IC market will grow by 175% annually through 2006. Some of that can be attributed to the acceptance of digital subscriber lines and fiber to the home. The challenges that the IC manufacturers face will be to optimize performance, power consumption and of course, reduce costs. Look for significant improvements and further integration of designs.
As you can see, next year shows promise in some but not all markets. Many see the new year to be the year of the slow turn-around. No matter what happens we will continue to create designs that are smaller, more integrated, consume less power and are less costly than the previous generation.
Analog Main | Product of the Week | Editorial | Tech Notes
