Explosion of smartphones and LTE phones buoys the world handset RF semiconductor market
Date: Wed, 09/28/2011 - 18:27 Source: Frost & Sullivan press department
In most countries, the global handset industry has evolved at a furious pace from a simple voice service to the current video broadcasting. The demand for improved functionality particularly in smartphones and long-term evolution (LTE) phones has increased radio frequency (RF) component requirements in handsets.
The number of RF semiconductor components in handsets has escalated steeply, increasing the cost share of these components in the baseband module. Handsets that support multi-mode cellular operation are witnessing vigorous uptake and these handsets require more switches to effectively switch between these modes. This has resulted in an upsurge in demand for switches.
New analysis from Frost & Sullivan, World Handset RF Semiconductor Market, finds that the market earned revenues of over $50.0 billion in 2010 and estimates this to reach $74.5 billion in 2015.
"New market penetration, particularly in the developing countries, has triggered a spike in the number of handsets sold worldwide," says Frost & Sullivan Analyst Prem Kumar Manickam. "With burgeoning mobile sales, the demand for switches has experienced an uptrend."
On the back of worldwide 3G deployments, the number of services offered to customers has proliferated. New services—such as ground positioning systems (GPS), video calling facility, location based services, etc.—are being offered by network operators, particularly in the developing countries, where 3G is deployed.
To support these new features, high-end phones should be used and this has boosted the demand for RF components. Phones with improved functionality are required in order to receive new services, thus triggering greater demand for new model handsets.
Technical complexity and the ever-changing customer requirements pose impediments for original equipment manufacturers (OEMs). Adding to this complexity is the demand for new functionality from high-end mobiles. Decreasing returns from component sales are also causing angst for participants.
The integration of many components onto a single module poses a greater technical challenge in the baseband design. Board space needs to be at a minimum, yet more components are to be integrated. The level of integration in the front-end module will continue in the future as most chip manufacturers seek to achieve a single chip solution. Effective management of power consumption in the RF components needs to be addressed for overall efficiency of the baseband module.
Going forward, handsets will become more complex in their functionality, due to multi-bands requirements by most customers. Silicon-based complementary metal-oxide-semiconductor (CMOS) chips will be the choice of many in the future as they offer optimized functionality and fulfill 4G requirements. Outsourcing and complete integration of all the RF semiconductor components will give OEMs the cutting edge against competition. Growing competition from Asian participants also must be addressed.
"Fierce competition in the RF components market demands the adoption of low-cost leadership by the participants to achieve better market positioning," says Manickam. "A good understanding of the subtle nuances of the handset industry is needed for OEMs to keep in step with changing customer needs."