The Enterprise Storage Semiconductor Market Eclipsed the $1 Billion Mark in 2005

The enterprise storage semiconductor market, which includes products selling into both internal and external RAID systems and SAN infrastructure equipment, eclipsed the $1 billion mark in 2005 and will continue to experience modest growth through 2010. Despite its attractive underlying demand trends, much of the storage market has remained closed to all but a few vendors. To date, ASICs and general purpose CPUs have ruled in much of the storage signal path. However, a number of factors are converging to create greater opportunities for new vendors.

Opportunities for New Solutions
The following trends are helping to create legitimate market entry points for new solutions:

• Adoption of serial ATA (SATA) and serial SCSI (SAS) in core enterprise applications.
• Shift in the system-level revenue drivers towards software and services and away from hardware.
• Evolution of the market supply chain are helping to create legitimate market entry points for new solutions.

However, not all segments will provide equal opportunity.

Learn More
Read IDC's study entitled Worldwide Enterprise Storage Semiconductor 2006-2010 Market Forecast and Analysis, (IDC #200960).

NAND Market to Enter a Phase of Sharp Competition, as Market Expands

The NAND market will enter a phase of sharp competition, not dissimilar to the growth stage of the DRAM industry 10 years ago. As the market continues to expand, IDC anticipates the entry of new players, which in turn will help to reduce future market volatility.

IDC's Forecast

• The NAND market will grow 27% to $13.5 billion in 2006.
• The market correction in 1Q06 should end due to capacity adjustments for DRAM, multi-level cell (MLC) technology ramp, and seasonality.
• Low pricing and mobile demand will lead the market balance in 4Q06.
• NAND revenue will nearly hit the $20 billion mark by 2010.
• Price erosion for the 2006-2010 period will drive bit growth demand, especially for high-density products.

Learn More
Check out IDC's newest Worldwide NAND Flash Demand and Supply 4Q05-4Q06 and 2006-2010 Market Forecast, (IDC #201022).

Taiwan Thrives in the Semiconductor Market, But what does the Future Reserve?

Taiwan has successfully thrived in the semiconductor market for nearly three decades and established a strong supply chain that symbolizes a successful business model for integrated device manufacturers (IDMs), IC design companies, and dedicated foundry suppliers.

Key Accomplishments

• In the dedicated foundry industry, the top 2 vendors, Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC), represent more than two-thirds of the sector.
• In the back end (assembly and test), Advanced Semiconductor Engineering (ASE), SPIL, and ChipMOS serve over 30% of the worldwide market.
• Taiwan is the second-largest IC design country next to the United States, contributing over 23% of the global fabless IC market.
• Taiwan is the third-largest DRAM manufacturing country.

Grey Clouds on the Horizons

• The pace of Taiwanese IC manufacturers' expansion into China is still strictly controlled by Taiwan's government policy.
• Long-term growth for the Taiwanese semiconductor vendors will require more than cost leadership.
• A platform approach will be essential for Taiwanese IC companies to compete on a global scale.

Learn More
Read IDC's Taiwan Semiconductor Market Assessment, (IDC #35058)

If all Goes Well, 2006 Could be Remembered as the Year WiMAX Became Real

If all goes well for the technology's proponents, 2006 could be remembered as the year WiMAX became real. The mobile 802.16e standard was ratified just at the end of 2005, and January saw the first official 802.16-2004 WiMAX-certified products. A handful of major semiconductor vendors and several start-ups are looking to gain from a boom in WiMAX market opportunities, but they are more likely to see slow and steady growth in the near future.

Key Findings

• WiMAX semiconductor revenue will climb rapidly to $607 million in 2010, initially from the growth of fixed broadband wireless implementations and then from the volume rollout of WiMAX-enabled laptops.
• WiMAX will be initially complementary to both WiFi and 3G cellular but may face stiff competition from 3.5G technologies if it does not gather enough momentum.
• Early mobile WiMAX may include nomadic PC implementations of 802.16-2004 that will be quickly replaced by 802.16e-enabled laptops.

Learn More
Check out IDC's Worldwide WiMAX Semiconductor 2006-2010 Forecast and Analysis (IDC #34939).

" The VoIP semiconductor market has been around for almost a decade, although it was limited to a largely invisible position deep inside the networks of service providers as they capitalized on the efficiency of compression and packetized transport of TDM traffic. The emergence of Internet telephony service providers and the ensuing competition for subscriber dollars that were once the exclusive province of the ILECs has brought VoIP into the collective awareness. Broadband service providers, with their low cost of customer acquisition and large installed base of subscribers, are seizing on the opportunity provided by VoIP enabled gateways and are driving demand for these integrated systems from almost nothing a year ago to over a quarter of volume entering 2006. This merging of the voice and data signal path will continue over the next several years, in numerous applications, with voice becoming a critical horizontal technology for semiconductor suppliers seeking leadership positions in these consumer segments." – Ian Eigenbrod, Senior Research Analyst for IDC's Semiconductors: Networking, Broadband, and Storage Systems research.

Intellon Achieves Market Milestones in Shipments of Powerline Communications Integrated Circuits
April 11, 2006
Business Wire

"Hitting this milestone signifies that the demand for reliable, secure and simple-to-use in-home entertainment networking silicon is on the rise," said IdaRose Sylvester, Senior Analyst at IDC. "It is expected that HomePlug-enabled product shipments will continue to increase, as the HomePlug technology adoption rate increases in a variety of consumer electronics platforms worldwide in 2006 and beyond.

Chip Makers TSMC and UMC See Big Jump in Q1 Sales
April 10, 2006
CIO Magazine

"Demand for chips has been generally strong since the second half of last year," said Betty Lin, a semiconductor analyst at IDC Asia-Pacific in Taipei. "We have seen this trend since the late third and fourth quarter last year," she said, noting that chip inventory levels appeared to be low.

PMC Updates 4G FC
April 3, 2006
Byte and Switch

"With 4G SAN ports ramping sharply this year, storage array OEMs worldwide are looking to accelerate the delivery of their next generation systems," said Ian Eigenbrod, senior research analyst with IDC. "Leading silicon vendors are enabling this transition to 4G by owning the storage signal path with end-to-end chipset solutions, guaranteeing component interoperability from controller to disk and minimizing time to market for these new high-performance systems."

Nanotubes May Go into TVs
March 20, 2006
Red Herring

“How quickly carbon nanotube TVs will become popular remains uncertain, particularly since LCD and plasma TVs are still relatively new to the consumer market," said IdaRose Sylvester, an analyst with IDC. "Putting nanotech in TV is getting ahead of yourself," Ms. Sylvester said. "There is a lot of proof of concept and proof of marketing to come.”

Dell Snaps Up Alienware
March 22, 2006
PC World

"…But from a technological perspective, "there is not much difference in the inner workings of a PC and a current-generation gaming box. It's all in the graphics and, of course, the user interface," said IdaRose Sylvester, an analyst with IDC's Consumer Semiconductor Program. So Dell may find commercial success by targeting this niche market, she said. In fact, the company's timing is excellent. "This is a particularly good time now, since we are at the start of a major uptick in the gaming cycle for consoles. There can be a halo effect with more games coming out for both platforms, creating more consumer knowledge and awareness," Sylvester said.

China's Grace Semiconductor Seeks Debt Repayment Delay on Loss
March 17, 2006
Bloomberg

"Grace needs more than government connections to succeed because they're in an international business and competition is fierce,'' said Betty Lin, a Taipei-based analyst at IDC Holdings Ltd., a technology consultancy. "Grace has less than 2 percent of the made-to-order chip market, compared with more than 50 percent for Taiwan Semiconductor," Lin said.

Analysis: Intel news hints at future Apple products
March 13, 2006
MacWorld

“Apple has said nothing and is so secretive that we'll likely not know until the official announcement,” says Shane Rau, Program Manager for PC Semiconductors at market research firm IDC. “However, it would make sense that, as it transitions its client systems to Intel chips, Apple would also use the technology to transition its Xserve server systems over to Intel chips, like Xeon.

IDC at SEMICON West 2006
San Francisco, CA
July 10, 2006
For more information contact Anne-Sophie Dankens at adankens@idc.com

Asia Pacific Semiconductors

•  Taiwan Semiconductor Market Assessment - Doc # 35058

Electronic Manufacturing Devices

•  The EMS Industry: Increasing Value-Add Through Aftermarket Services - Doc # 34807

Liquid Crystal Displays (LCDs)

•  Worldwide TFT-LCD 3Q05-2Q07 Forecast: Price Tracking - Doc # 34764 

Semiconductors: Consumer Devices

•  No Small Move: Micron Acquires Lexar Media - Doc # 35033
•  The World Is Flat and Other Consumer Semiconductor Observations for 2006 - Doc # 34852
•  Ikanos Sees Gateway to New DSL Opportunities - Doc # 34786  

Semiconductors: Networking, Broadband and Storage Systems

•  Worldwide Enterprise Storage Semiconductor 2006-2010 Market Forecast and Analysis – Doc # 200960
•  ClariPhy-ing an Opportunity in 10 Gigabit Ethernet - Doc # 34892

Semiconductors: Personal Computing

•  Worldwide NAND Flash Demand and Supply 4Q05-4Q06 and 2006-2010 Market Forecast – Doc #201022

 Semiconductors: Wireless

•  Worldwide WiMAX Semiconductor 2006-2010 Forecast and Analysis - Doc # 34939

Contact Anne-Sophie Dankens at 508-935-4313 or adankens@idc.com

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