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APRIL 20, 2005 RELEASE

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IC Insights Raises 2005 Semiconductor Industry Capital Spending Forecast
2006 Spending Outlook Also Lowered as a Result

Scottsdale, Arizona --- April 20, 2005 --- According to IC Insights’ 2005 Emerging IC Markets Report, the wireless networking segment is forecast to be a bright spot in an otherwise relatively flat 2005 IC market.  A forecast to 2008 for the wireless networking chipset market in terms of dollars and units (a unit being a single chip or chipset consisting of several devices) is shown in Figure 1.  Over the 2004-2008 time period, the market for wireless networking chipsets is expected to show an average annual growth rate of 23 percent in dollars and 35 percent in unit shipments!

The 802.11 chipset portion of the total wireless networking market is forecast to grow from $680 million in 2004 to $1.5 billion in 2008, an average annual growth rate of 21 percent.  Throughout this time period, the 802.11 segment is expected to represent about 50 percent of the total wireless networking chipset market.  The average annual unit growth rate for 802.11 chipsets during the same period is expected to reach 32 percent, as the average selling price (ASP) falls from $17 in 2004 to $12 in 2008.

The Bluetooth chipset segment of the total wireless networking market is forecast to expand from $580 million to $1.5 billion over the 2004-2008 time period.  IC Insights believes that the ASP of a Bluetooth chipset in 2008 will be about one-fourth the price in 2002.  Low cost is one of the main factors that will enable more widespread deployment of Bluetooth technology in the coming years.

As of early 2005 there are 82 known suppliers of ICs for wireless network applications.  Of those companies, 53 offer 802.11 ICs and 33 offer Bluetooth ICs (some offer both).  Although IC Insights believes that the wireless network market has room for many IC suppliers, there seems to be an excessive number of companies fighting for marketshare.  Given that, there has been and will continue to be some consolidation among companies and some participants that succumb to competitive pressures.  Examples from 2004 include RF Micro Devices buying Bluetooth chip supplier Silicon Wave and Agere System’s exit from the stand-alone 802.11 chip business.

Figure 1 

More information about the wireless networking market and other important end-use applications can be found in IC Insights’ Emerging IC Markets 2005.  The report contains 300 pages and covers numerous electronic systems such as wireless networking, cellular phones, digital cameras, automotive, RFID, and digital TVs that will drive IC industry growth.  Single-user copies of the report (binder or CD-ROM) are only $1,990, with company-wide use licenses also available.

About IC Insights

IC Insights, Inc., based in Scottsdale, Arizona, is dedicated to providing high-quality, cost-effective market research for the integrated circuit industry. Founded in 1997, IC Insights offers coverage of global economic trends, IC market forecasts, capital spending and fab capacity trends, product market details, and technology trends, as well as complete IC company profiles and evaluations of emerging markets for ICs.

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