A Tough Road Ahead for Base Station Components-- Worldwide Semiconductor Forecast

Abstract

This report is required reading for anyone tracking the state of the cellular base station market and its associated markets in base station semiconductors. Included in this report are the three top forecasts for monitoring the base station equipment and base station semiconductor markets: new base stations, new base station revenue, and new base station semiconductor revenue. All three of these forecasts are broken-out by technology and region.

While research reports of competitor companies contain forecasts of sectors shipped, or base stations worldwide, this report digs deeper to give a clearer view on the market by expanding on the technology breakdown and regional makeup of base station shipments.

Going forward, this will be a tough time for those producing base station equipment and semiconductors, and the weaker companies, or those poorly positioned, will not likely survive. Not only are we facing an economic slowdown the likes of which have not been seen in 25 years, but also infrastructure manufacturers are just coming off an unusual infrastructure growth spurt, with operators around the world spending billions on new 3G equipment. Unfortunately, that growth couldn' t go on forever, and there is nothing like a good recession to get operators to rethink their spending plans.

With the transition to WCDMA, spending on GSM base stations is coming to a halt quickly, but some operators are transitioning to EDGE, and have no immediate plans to spend large cash outlays for new WCDMA equipment. CDMA equipment manufacturers face a different challenge. CDMA operators are actively upgrading their equipment to CDMA2000 1X EV-DO, but without an evolutionary technology enhancement path beyond that technology, CDMA operators are becoming increasingly hesitant to invest more money into their CDMA systems. To make matters worse, some operators are switching from CDMA to EDGE, and, even in South Korea, CDMA subscribers are getting snatched away by WCDMA systems.

• Base station semiconductor revenue will decline an average of 12.3% per year from 2008 - 2012.
• The slowing worldwide economy is having wide-ranging negative effects on all regions, with the possible exception of Africa.
• Base station semiconductor revenue will drop from $7.2B in 2007 to $4.6B in 2008.

• Cellular base station unit forecasts by technology and region, cellular base station revenue forecasts by technology and region, and base station semiconductor revenue by technology and region.

• Infrastructure manufacturers
• Wireless operators
• Semiconductor companies that make components for cellular base stations
• Backhaul companies

• What is the size of this market?
• How are prices adjusting to changing demands?
• What are the regional impacts on the market?
• What are the expectations for future growth?
• How is our slowing economy impacting base station sales?