Press release, August 10; Esther Lam, DigiTimes.com [Thursday 10 August 2006] 

The digital signal processor (DSP) has increasingly gained importance in the micro-logic market while the overall MCU market remains the second largest contributor to worldwide processor revenue, according to research firm Databeans.

DSP is included in worldwide processor revenue along with microprocessors and microcontrollers, though with the smallest contribution, is outpacing the other two in terms of growth, with a compound annual growth rate (CAGR) of 14% over the next five years, compared to 10% for microprocessors and 8% for microcontrollers, noted Databeans.

Source: Databeans, compiled by DigiTimes.com, August 2006

DSP has earned its position in the semiconductor market from the mobile phone application. Nokia is the largest DSP customer, followed by Motorola, Samsung Electronics, LG Electronics, and BenQ-Siemens. Although wireless will remain the real application driver for DSP, other applications, including digital audio, IP phones, medical diagnostic imaging and digital video, also incorporate this technology.

The largest market for DSP by far is the wireless communications market because of the large volume of mobile phones that ship every year. DSP performs the rapid signal processing required in digital voice transmission. Typical platforms include products that operate at over 100MHz for handsets and up to 1GHz for base stations. Handset applications use 16-bit products with performance up to 600MIPS.

Databeans estimates that wireless mobile phones will contribute over 85% to overall communications DSP worldwide revenue, or over US$7 billion, in 2006. Overall communications DSP revenue, comprised of mobile phones, wireless infrastructure, short-range wireless, other wireless, and wired applications, is estimated at 80% of the entire DSP market, which is expected to reach over US$9 billion this year.

Texas Instruments (TI) commands the mobile phone DSP market, with about two out of every three phones containing a TI DSP. DSP revenue from the mobile phone market is expected to increase from over US$6 billion this year to twice this amount by 2011. This growth would average to a compound annual growth rate of 15 percent. Other applications are growing at the same or better rate, in terms of generating DSP revenue, but for the duration of the forecast period, the majority share of DSP revenue is expected to come from mobile phones.

Source: Databeans, compiled by DigiTimes.com, August 2006