For the first time in two years, we are raising our forecast of the worldwide general-purpose digital signal processor (DSP) chip market. The shipment numbers are in for Q3 and they are very good. DSP shipments for the first three quarters of 2003 were up 13.6% over the same period last year, according to the WSTS (World Semiconductor Trade Statistics) organization. When you compare this with the 2.3% increase of the worldwide “monolithic IC” market over the same period, DSP is a clear winner. After reviewing the Q4 market guidance of market leader Texas Instruments and increased projections of cellular phone shipments by the financial community, we have increased our earlier 15% shipment growth to 20% for 2003. Also, after earlier cutting back our 2004 forecast, we are also raising it from 20% to 25%.After many interviews with the major DSP chip vendors, Forward Concepts has estimated 2002 market shares as follows:  

($Millions)

The DSP market continues its inexorable shift to the Far East.  The table below shows the dramatic shift in market shares of shipments to the primary geographic regions.  It should be noted that Japan has staged a strong market increase over the last two quarters, driven both by consumer and cellular applications.  The Asia Pacific market consists primarily of Korea and China, with the latter country now the biggest digital wireless customer in the world…and digital wireless can only exist through DSP technology.  At this point, it should be noted that wireless now accounts for 67.7% of DSP shipments through 9/03.

DSP SHIPMENTS BY REGION

Consumer Market Up Dramatically

Although digital wireless is the major market for DSP silicon, the biggest Y-Y gain through Q3/03 has been the consumer market, with shipments up 75.6% over the same period last year.  Consumer is a DSP market heavily driven by audio and video entertainment products, with Set Top Box and DVD applications leading the pack. Other DSP-based products that are selling well include A/V Receivers (for home theatres), MP3-type players of several kinds, and digital still cameras. 

Which reminds me, I still have a 35mm film cameral with half a roll of film unexposed for several months. I may just have to take pictures of my cats to finish the roll.  I returned last week from a backpack trip into the Grand Canyon with five companions, and none of us had a film camera.  I took 107 pictures with my digital camera, including the rattlesnake, the ravens, the condor, the mountain sheep, the beautiful scenery and of course, my hiking friends.  There's a clear trend that favors DSP technology here.

DSP Market Shares through Q3/03

The accompanying table illustrates the relative sizes of the general-purpose, programmable DSP market (no, we aren't discussing the myriad of "embedded" DSP applications, here). Wireless and consumer were discussed above.  Multipurpose is primarily shipments through distributors or high-value DSPs sold in small quantity. Shipments in that category are off some 11.8% from the like period in 2002. Wireline, which is mostly telecom, is still lackluster; declining some 4.5% in shipments compared to 2002's miserable record.   Automotive consists mostly of dashboard electronics for telematics and entertainment, but with a small but growing set of drive train applications.  That market is up slightly (1.8%) over the like period last year.

2003, Q1-Q3

Source: WSTS

Computer and Peripherals (the correct WSTS term) consists mostly of disk drive controllers, and shipments are down by almost 43% compared to the prior year.  But that's not the whole story.  As disk drive controllers have become SoCs (or ASICs or ASSPs, if you prefer), they are no longer being reported as "DSP chips", but are now part of the huge embedded DSP market.  The same SoC trend has also moved DSP-based DSL chips, many DSP camera chips and others to the WSTS "ASIC" or "microperipheral" reporting categories.  So, DSP core shipments continue growing well beyond the "DSP chip" market.

We are working hard to complete our long overdue "DSP Strategies 2003" report by the end of the month.  It will cover not only the general purpose DSP market, but will also cover ASIC DSPs, Function-Specific DSPs, Reconfigurable DSPs, Media Processors, and even MPUs/MCUs dedicated to DSP.  We'll notify you when it's ready for publication.

As always, we welcome your comments.

Will Strauss

wis@fwdconcepts.com

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