Wireless-Chip Market Outpaced Wireline-Chip Market in 2007 Says The Linley Group

MOUNTAIN VIEW, CA--(Marketwire - April 21, 2008) - Growing adoption of 3G technologies and feature-rich cell-phone chips led to a 13% increase in sales of cellular baseband processors in 2007, according to The Linley Group. Sales of networking chips, in contrast, declined by about 1% during the same period according to the company's latest report, "Communications Silicon Market Share 2007." The slowdown in wired-communications chips is also reflected in the FPGA market as sales of FPGAs for communications systems declined 7%.

The Linley Group attributes the decline in part to a 20% drop in sales of DSL ICs. Even as the number of DSL subscribers rose worldwide, price erosion and revised inventory policies forced chip revenue down. Infineon emerged as the top supplier of DSL ICs through its acquisition of the languishing DSL business of Texas Instruments, overtaking both Broadcom and Conexant in DSL and becoming the second-largest supplier of wireline-communications chips overall. Broadcom remains by far the largest wired-comm chip supplier, eking out modest growth even as total industry revenue declined and the company lost share in Gigabit Ethernet application-specific standard products (ASSPs).

Total sales of Ethernet ASSPs increased 6% in 2007, propelled by strong growth in revenue from Gigabit Ethernet switches, where smaller vendors such as Marvell and Vitesse chipped away at the share of market-leader Broadcom. Broadcom also gave up share in GbE clients as Intel attacked at the high-end and low-cost suppliers such as Realtek and Atheros opened up the consumer market.

In the $250 million network-processor (NPU) market, Intel was the top supplier, experiencing significant growth as sales of systems using its latest NPU designs increased. LSI, which acquired Agere in 2007, grabbed second place in the rankings. Growing faster than Intel, 10 Gigabit specialist EZchip climbed four places in the rankings, to just behind third-ranked access-network specialist Wintegra.

Qualcomm overtook Texas Instruments as the leading baseband-processor supplier in revenue terms. Qualcomm benefited from rapid growth in WCDMA shipments on top of its large CDMA business. While maintaining a strong position at handset-leader Nokia, TI was hurt by share losses at Sony Ericsson. Taiwanese tiger MediaTek continued its tear, growing baseband-processor revenue more than 80% in 2007 to overtake struggling Freescale as the third-ranked supplier.

"After years of relative stability in wireless market-share rankings, a reshuffling occurred in 2007," said Linley Gwennap, Principal Analyst, The Linley Group. "More change is under way in 2008 as MediaTek completes its acquisition of the cellular business of Analog Devices, ST and NXP form their joint-venture, and smaller suppliers take on the more established companies."

Details are available in "Communications Silicon Market Share 2007" a report released today by The Linley Group, the leading provider of independent analysis of the communications-silicon industry. It provides market-share information for four categories of mobile and wireless chips, more than fifteen categories of wired communications products, FPGAs, and embedded processors. http://www.linleygroup.com/Reports/mn_guide.html

About The Linley Group

The Linley Group, the leading provider of independent technology analysis for networking, communications, and consumer electronics semiconductors, covers emerging areas such as high-speed embedded processors, Gigabit and 10G Ethernet, mobile communications processors, and more. The company provides in-depth technology reports and interactive seminars as well as strategic consulting services tailored to the individual client. To get free access to The Linley Group's analysis of recent news and events in these markets, subscribe to our e-mail newsletters. More information about The Linley Group is available at http://www.linleygroup.com.

Contact Information: Contact: Candace Doyle Company: The Linley Group Phone: 408.370.7631 Email: Web site: www.linleygroup.com