DSP/Wireless Market Analysis

April DSP revenues: Lackluster This informal mid-month newsletter is later than usual because there's really nothing to be excited about in the latest statistics. But, we think there are some interesting industry and technology developments to call to your attention. First, overall DSP chip shipments in April 2007 were down almost 9 percent compared to March levels, which were up 42 percent over February levels. Cellphone DSP revenues up...slightly

Cellphone DSP shipments, a key barometer of the wireless market, were up 1.3 percent in April; but that's actually pretty good, since March was up 30 percent over the prior month. Shipments in the first month of a new quarter are usually below that of the prior month (the last month of the previous quarter), so any increase in the first month of a new quarter is a good sign. What's more, ASPs for cellphone DSPs were up a heart-warming 11 percent in April. We're expecting a stronger second half in cellular because of dramatic growth of WCDMA in Europe, the ramp of 3G in China (including its home-grown TD-SCDMA), and perhaps the iPhone frenzy expected to begin later this month.

We don't expect much overall market impact this year from the ITC ban on U.S. imports of future 3G mobile handset models employing Qualcomm WCDMA or EV-DO chipsets following Broadcom's patent infringement win in court. Besides, we think that an early stay by the Federal Circuit Court of Appeals is possible and eventually (after lots of bluster and legal maneuvering) the two companies will come to an agreement that will permanently remove the ban.

Total semiconductor market outlook Our 3.5 percent forecast growth for all ICs in 2007 appears to be optimistic compared to the Semiconductor Industry Association's revised forecast of 1.8 percent announced last week (down from its earlier 10 percent forecast). The SIA blames most of the slow (revenue) growth on falling ASPs for DRAM and MPUs, rather than fewer unit shipments. The chip market pickup that many expected from new PCs based on Microsoft's Vista operating system has failed to materialize.Exciting new camera technologies

How many times have you clicked to take a digital picture of your kid in action on the soccer or ball field and found that by time the auto focus had done its job and the shutter clicked you have some other kid in the photo. That delay is a key source of frustration to users and auto focus is an added expense for the camera.

Now, wavefront coding and DSP technologies are becoming available to eliminate mechanical auto focus mechanisms, providing an extreme depth of field that allows virtually everything from a few inches away to the horizon to be in focus instantaneously. This technology requires a specialized lens and a close relationship between optics (encoding) and image processing (decoding) which enables digital cameras to capture images that are sharp and clear, eliminating the need for motors and mechanical focusing mechanisms. The elimination of mechanical components can be especially valuable in cellphones from both size and power consumption standpoints. Companies like Magnachip, OmniVision, DXO, and Transchip are all developing products that support wavefront optical coding or similar techniques for auto focus.

In addition, Tessera, best known for its chip packaging technologies, has announced its OptiMLT wafer level camera technology which makes it possible for cameras to be manufactured at the wafer level, drastically reducing the size and total bill of material cost of camera modules. Through this technology, thousands of specialized lenses are manufactured simultaneously on a wafer, and then bonded at the wafer level to create the optical element of the camera. Tessera's OptiML is said to enable simplified assembly and can provide up to 30 percent in cost savings for the optical component of the camera module and delivering up to 50 percent size reductions over conventional camera modules. Tessera plans to license its technology to others.

Ceva introduces its first 32-bit DSP core Ceva Inc., the market leader in licensing DSP cores, has introduced the CEVA-TeakLite-IIIT, a third-generation architecture based on the broadly adopted TeakLite family of DSP cores. The native 32-bit architecture is backward compatible with previous versions of TeakLite cores and is said to deliver higher performance and lower power for applications such as 3G cellular handsets, HD Audio, VoIP, and portable audio devices.

Although the new core features a 32x32 MAC (great for audio dynamic range), it also has dual 16x16 MACs and the device supports both 16-bit and 32-bit instructions without the need for mode switching, providing better code density. This core will be available for 90 nm and 65 nm processes with speeds up to 425 MHz. But, raw speed doesn't tell the whole story. The new core includes an FFT accelerator (great for 7.1 channel Dolby Digital), a traditional Viterbi accelerator (for communications) and a set of SIMD and parallel instructions.

Shameless plugs Forward Concepts has just introduced its latest market study, "Cellular Handset and Chip Markets '07," the most comprehensive cellular handset and chip market study now available. It is an in-depth analysis of the top 37 handset makers and provides market sizes and vendor market shares for handsets by air interface and for virtually all integrated circuits that go into a cellphone. Subscriber and handset forecasts by air interface for each global region are also provided in the 370-page study. Details are at: http://www.fwdconcepts.com/cell7.htm

Our latest market study, "DSP Chip Strategies '07" is also available. The 338-page report is an in-depth study of IC markets driven by digital signal processing technology, not just "DSP chips." Embedded DSP chips are also covered, including ASICs, ASSPs, FPGAs, RISCs, and Massively Parallel Arrays for DSP application are also covered. The report is believed to be the most comprehensive available of markets driven by DSP technology, and includes the results of a new survey of DSP professionals from over 30 countries.

As always, I invite your comments.

Will Strauss wis@fwdconcepts.com