Wireless LAN chip market forecast to grow 29% annually

The worldwide wireless LAN (WLAN) semiconductor market will achieve a compound annual growth rate (CAGR) of 29% over the next five years, according to research firm IDC, Mountain View, Calif.

Total WLAN semiconductor revenues will increase from $331 million in 2001 to $1.16 billion in 2006, the company estimates. This growth will be fueled by decreasing power, size, and cost requirements that will enable embedded solutions to become the more prevalent form factor, it said.

"IDC expects PC vendors will increasingly shift toward an embedded approach as the demand for mobile connectivity makes WLAN an attractive offering within notebook PCs," said Ken Furer, research analyst with IDC's Semiconductor group.

The emergence of dual-band chipsets will also be a major trend to watch, especially as pricing for these systems decline steadily going forward, he added. IDC expects the dual-band approach will become predominant by 2004 as assurance ofbackward compatibility to 802.11b and future proofing to 802.11a becomes an important selection criteria.

WLAN semiconductor vendors continue to post strong sales growth, especially for the first half of 2002. Intersil still remains the leading supplier while Agere and others have come knocking on its door, according to the research house. "As margins become further constricted, IDC believes this space will favor only a handful of vendors that are able to ride the cost curve by specializing in this market. Certain vendors, which can leverage lower manufacturing costs, particularly in digital and RF CMOS should have a distinct advantage," Furer said.

News source: EBN - Wireless LAN chip market forecast to grow 29% annually