VoIP demand drives semiconductor sales

Stella growth in VoIP adoption will fuel a frenzied demand for VoIP semiconductors, market watchers predicted today.

Analyst firm IDC stated that worldwide VoIP semiconductor sales will grow to over $2.4bn in 2009, with a compound annual growth rate of 38.9 per cent for 2004-2009.

However, IDC warned that as VoIP overcomes its early adoption barriers and kicks off a new phase, opportunities and threats are emerging for the makers of semiconductors designed for VoIP systems.

"With basic product line-ups complete, VoIP equipment vendors must look for opportunities to differentiate their offering and deliver tailored solutions," said Ian Eigenbrod, senior research analyst at IDC's semiconductor programme.

"This need is creating new 'design-in' opportunities and is ushering in the next phase of the VoIP semiconductor market evolution which will be key to establishing market leadership in the long term."

IDC noted that the carrier segment (media gateways and soft switches) and the consumer segment (broadband gateways) will account for the bulk of the value of VoIP semiconductor shipments until 2009.

The report examined voice processing-specific semiconductors within the VoIP end markets. This includes digital signal processors, ASSP/ASICs, PLDs and related analogue components (SLICs and SLACs) that are responsible for the termination and conversion of traditional telephone system voice traffic into IP packets, and vice versa.

IDC expects to see a battle over the optimal architecture at the component level, which threatens to disrupt the dominance of digital signal processors in the voice signal path.

The study goes on to predict that VoIP functionality will be embedded in communication systems, as voice becomes another application in the network.