Digital Signal Processor (DSP) Market to 2020 - Sales Growth
in Smart Phones, Digital Cameras and Laptops will Sustain
Demand
Reference Code: GBISC008MR Publication Date: April 2011
Voice over Internet Protocol (VoIP) Market to Drive DSP Sales
The growing market of Opportunities in the VoIP semiconductor market are expected to drive Digital Signal Processor
VoIP communication (DSP) growth. The market for VoIP semiconductor is growing with the continual replacement of
platform is expected to traditional switches with VoIP technology. This is a prominent trend, particularly in Asia Pacific,
boost the demand for the where telecommunication companies prefer VoIP over cable systems. VoIP over cable will need
Digital Signal Processors DSPs in every subscriber’s home
(DSPs).
VoIP has the potential to change the way we communicate by converging voice, text and video in
a cost effective manner. The growing market of VoIP communication platform is expected to boost
the demand for the Digital Signal Processors (DSP).
Global VoIP Semiconductor Market Revenue by Geographic Region, 2009,
Rest of the World,
2.9%
Americas,
28.6%
Asia Pacific,
54.3%
EMEA,
14.2%
Source: GBI Research
The growth of the VoIP semiconductor market is shifting the revenue distribution in favor of the
Asia Pacific region. As can be seen in above figure, this region’s contribution to the overall VoIP
semiconductor market revenue was 54.3% in 2009 and it is expected to reach 68% by 2012. Much
of the growth is anticipated to be triggered by India and China. Due to their low-cost, VoIP
semiconductors are in demand in Asia Pacific.
Digital Signal Processor (DSP) Market to 2020 - Sales Growth in GBISC008MR / Published APR 2011
Smart Phones, Digital Cameras and Laptops will Sustain
Demand Page 1
© GBI Research. This is a licensed product and is not to be photocopied
IP Surveillance Will Drive the Growth of DSP Chips During the Forecast Period
The growth in the Internet Protocol (IP) surveillance market is expected to drive DSP sales as the
demand increases for new ICs with special functionalities (trigger automatic response and threat
detection) to power IP video surveillance cameras and IP servers. In 2009, revenues from IP video
cameras nearly doubled and touched $3.9 billion in 2010. In 2010, the global IP surveillance
camera market grew larger than the conventional ‘Closed Circuit Television’ (CCTV) camera
market. Meanwhile, the IP surveillance server market expanded to $1.3 billion in 2010.
IP Video Surveillance Cameras and Servers, Global, Revenue ($m), 2009
6,000
4,000
Revenue ($m)
2,000
0
2004 2007 2010
IP Cameras IP Servers
Source: GBI Research
The fast-growing market for IP surveillance video servers and cameras will have a positive impact
on the demand for DSPs. Semiconductor technologies are incorporating new features in IP video
surveillance servers and cameras. IP cameras are transitioning to digital, with companies
manufacturing smarter cameras which include features such as image tracking, alert system,
image recognition, and response.
IP cameras incur lower costs during installation and enable remote monitoring, centralized storage
and backup. Further, IP video systems enable broader system-level integration with industry
specific solutions for traffic control, public safety, retail, industrial, education, and consumer
applications. These advantages are expected to increase the adoption of IP cameras throughout
the forecast period.
IP camera is typically used to integrate network interfacing functions, video capture and video
processing. Thus DSP chips that support these tasks are among the most differentiated and
lucrative semiconductor opportunities in the IP surveillance market. There is significant variation in
requirements for video signal processors, ranging from minimal needs at the low end, to high-
performance multi-core DSPs at the high end.
Digital Signal Processor (DSP) Market to 2020 - Sales Growth in GBISC008MR / Published APR 2011
Smart Phones, Digital Cameras and Laptops will Sustain
Demand Page 2
© GBI Research. This is a licensed product and is not to be photocopied
China Will Provide the Much-Needed Boost to the DSP Market
The domestic market in China is the single largest contributor for DSP chip sales in the Asia Pacific
region. The 3G network is well-established in China and this, along with low handset prices,
created a boom in the mobile chipset market in 2009. Considering this fast-growing market in
China, the 3G mobile phone manufacturing, 3G chips and 3G-related components and content will
all provide market opportunities for DSP sales. China 3G mobile phone sales volume reached 40
million units in 2010.
China is the second largest producer of semiconductors and is expected to grow further with the
government committing to invest $50 billion in semiconductor related projects. The semiconductor
market in China has grown at 17.8% to reach $80.1 billion in 2010 as compared to $68 billion in
2009. The government in China plans to spend $25 billion on wafer fabs for domestic chip
manufacturing over the next five years. This will enhance the proportion of local demand met by
domestic wafer fabs and diminish chip imports in China.
Digital Signal Processor Market in the Consumer Electronics Sector to Gain Further Pace
Since 2005, consumer electronics has accounted for a growing share of the DSP market and this
trend is expected to continue until 2020. The consumer electronics sector is a significant contributor
to the DSP market after the communication sector. In the long-term, GBI Research estimates the
DSP revenues in the consumer industry market to grow at a CAGR of 4.2% to reach $2.3 billion
between 2009-2020.
Performance Vs Power – a Challenge for Digital Signal Processor
DSP vendors are trying to achieve high performance while minimizing power consumption. High
performance DSP chips are required, but a lot of processing means a lot of power consumed.
There is a need for DSP chips that consume low power to achieve a given performance, allowing
more performance to be contained in a given chip area. The main reason for using a DSP is to
enhance computational performance for real time applications such as voice and audio-video
communications.
Some DSPs are manufactured for low power operation, based on designing processes that are
tweaked for low power consumption. The design of these chips leverage the fundamental process
technology along with hardware characteristics that use the chip more power-efficiently, while still
enabling the high performance required for advanced applications.
DSPs offer a good trade-off between all three aspects: power consumption, performance and
flexibility. Performance and power are key areas of concern for DSP manufacturers to meet future
technological requirements
Digital Signal Processor (DSP) Market to 2020 - Sales Growth in GBISC008MR / Published APR 2011
Smart Phones, Digital Cameras and Laptops will Sustain
Demand Page 3
© GBI Research. This is a licensed product and is not to be photocopied
1 Table of Contents
1 Table of Contents ........................................................................................................................ 4
1.1 List of Tables..................................................................................................................... 7
1.2 List of Figures ................................................................................................................... 8
2 Introduction .................................................................................................................................. 9
2.1 GBI Research Report Guidance ....................................................................................... 9
3 Global Digital Signal Processor Market – Overview .................................................................. 10
3.1 Digital Signal Processor Definition .................................................................................. 10
3.2 Digital Signal Processor Key Applications ...................................................................... 11
3.2.1 Digital Signal Processor Applications in Communication ......................................... 12
3.2.2 Digital Signal Processor Applications in Consumer Electronics............................... 12
3.2.3 Digital Signal Processor Applications in the Industrial Sector .................................. 12
3.2.4 Digital Signal Processor Applications in the Automotive Sector .............................. 13
3.2.5 Digital Signal Processor Applications in the Computer Industry .............................. 13
3.3 Global Digital Signal Processor Market, Key Market Trends........................................... 14
3.3.1 Growing IP Surveillance Market .............................................................................. 14
3.3.2 High Growth in Wireless Communication ................................................................ 16
3.3.3 Voice over Internet Protocol (VoIP) - Emerging Opportunities for DSPs ................. 18
3.3.4 Emerging Asian Markets to Provide Opportunities for Sales Growth....................... 22
3.3.5 Upgrade to Broadband ............................................................................................ 22
3.3.6 Time to Market......................................................................................................... 23
3.3.7 Performance Vs Power ............................................................................................ 23
3.3.8 Extreme Price Pressure ........................................................................................... 25
3.3.9 Multicore DSP Chip Trends ..................................................................................... 25
3.3.10 Manpower Expertise in the Area of Design ............................................................. 25
3.3.11 Texas Instruments (TI) DSP Market Dominance ..................................................... 25
3.4 Porter’s Five Force Analysis ........................................................................................... 26
3.4.1 Threat of New Entrants ............................................................................................ 26
3.4.2 Bargaining Power of Suppliers ................................................................................ 26
3.4.3 Bargaining Power of Buyers .................................................................................... 26
3.4.4 Threat of Product Substitutes .................................................................................. 27
3.4.5 Competitive Rivalry .................................................................................................. 28
3.5 Global Digital Signal Processor Market –Environment Analysis ..................................... 30
3.5.1 Political Environment ............................................................................................... 30
3.5.2 Economic Environment ............................................................................................ 33
3.5.3 Technology Environment ......................................................................................... 34
3.6 Global Digital Signal Processor Market Supply Chain Overview..................................... 35
3.6.1 Overview ................................................................................................................. 35
3.6.2 Supply Chain Trends ............................................................................................... 35
3.6.3 Business Models ..................................................................................................... 36
3.6.4 Manufacturing Process ............................................................................................ 37
3.6.5 Fabrication Process ................................................................................................. 38
3.6.6 Die Packaging Step ................................................................................................. 39
3.6.7 Assembly and Testing ............................................................................................. 39
3.6.8 Distribution............................................................................................................... 39
3.6.9 Supply Chain Risks ................................................................................................. 40
4 Global Digital Signal Processor Market Sizing and Forecasts, 2004-2020 ................................ 41
4.1 Global Digital Signal Processor Market Sales Revenues and Forecasts, 2004-2020 ..... 41
4.2 Global Digital Signal Processor Market Sales Volumes and Forecasts, 2004-2020 ....... 43
5 Global Digital Signal Processor Market Analysis and Forecast based on Geography, 2004-2020
.................................................................................................................................................. 45
5.1 Americas Digital Signal Processor Market ...................................................................... 47
5.1.1 America Digital Signal Processor Market Sizing and Forecasts, 2004-2020 ........... 47
Digital Signal Processor (DSP) Market to 2020 - Sales Growth in GBISC008MR / Published APR 2011
Smart Phones, Digital Cameras and Laptops will Sustain
Demand Page 4
© GBI Research. This is a licensed product and is not to be photocopied
5.1.2 Leadership in Innovation ......................................................................................... 49
5.1.3 Shift to Overseas Production ................................................................................... 49
5.1.4 Competition ............................................................................................................. 49
5.1.5 Increased US Exports .............................................................................................. 49
5.2 Europe Digital Signal Processor Market ......................................................................... 50
5.2.1 Europe DSP Market Sizing and Forecasts, 2004-2020 ........................................... 50
5.2.2 Research & Development Initiatives ........................................................................ 52
5.2.3 Challenges to Address in the Industry ..................................................................... 52
5.3 Asia Pacific (APAC) Digital Signal Processor Market ..................................................... 53
5.3.1 Japan Digital Signal Processor Market .................................................................... 56
5.3.2 China Digital Signal Processor Market .................................................................... 59
5.3.3 Republic of Korea Digital Signal Processor Market ................................................. 63
5.3.4 Taiwan Digital Signal Processor Market .................................................................. 65
5.3.5 Rest of Asia Pacific Region Digital Signal Processor Market .................................. 67
6 Global Digital Signal Processor Market Analysis and Forecast based on End-user verticals .... 69
6.1 Global Digital Signal Processor Market in the Computer Sector, 2004–2020 ................ 69
6.2 Global Digital Signal Processor Market in Consumer Electronics Sector, 2004–2020 .... 71
6.3 Global Digital Signal Processor Market in the Automotive Sector, 2004–2020 ............... 73
6.4 Global Digital Signal Processor Market in the Industrial Sector, 2004–2020 ................. 75
6.5 Global Digital Signal Processor Market in the Communication Sector, 2004–2020 ........ 77
7 Global Digital Signal Processor Market, Competitive Landscape .............................................. 79
7.1 Global DSP Market , Competitive Structure .................................................................... 79
7.2 Global Digital Signal Processor, Market Share Analysis, 2009 ....................................... 80
7.3 Texas Instruments Inc. .................................................................................................... 81
7.3.1 Texas Instruments Inc. - Business Description ........................................................ 81
7.3.2 Texas Instruments Inc. - Major Products and Services ........................................... 83
7.3.3 DSP Market Leader Position ................................................................................... 84
7.3.4 Product Innovation................................................................................................... 84
7.3.5 Strong Growth in the Mobile Phone Market ............................................................. 86
7.3.6 Fierce Competition .................................................................................................. 86
7.4 Freescale Semiconductor, Inc......................................................................................... 87
7.4.1 Freescale Semiconductor, Inc. - Business Description ........................................... 87
7.4.2 Freescale Semiconductor, Inc. - Major Products and Services .............................. 89
7.4.3 R&D Activities .......................................................................................................... 90
7.4.4 Pioneer Market Player ............................................................................................. 90
7.4.5 High Performance DSP Technology for Multi-standard Wireless base stations ...... 90
7.4.6 New Product Launches ........................................................................................... 90
7.4.7 Highly Competitive Market ....................................................................................... 90
7.5 Analog Devices, Inc. ....................................................................................................... 91
7.5.1 Analog Devices, Inc. - Business Description ........................................................... 91
7.5.2 Analog Devices, Inc. - Major Products and Services ............................................... 93
7.5.3 Product Innovation................................................................................................... 94
7.5.4 Entry into emerging markets .................................................................................... 94
7.5.5 Over-dependence on Third Party fabrication facilities ............................................. 94
7.6 LSI Corporation ............................................................................................................... 95
7.6.1 LSI Corporation - Business Description ................................................................... 95
7.6.2 LSI Corporation - Major Products and Services....................................................... 96
7.6.3 Focus on R&D ......................................................................................................... 96
7.6.4 Wide geographical presence ................................................................................... 97
7.6.5 Weak Market Position .............................................................................................. 97
7.6.6 Focus on Networking and Storage Business ........................................................... 97
7.6.7 LSI on track to become a fabless company ............................................................. 97
8 Appendix ................................................................................................................................... 98
8.1 About GBI Research ....................................................................................................... 98
8.2 Market Definitions ........................................................................................................... 98
Digital Signal Processor (DSP) Market to 2020 - Sales Growth in GBISC008MR / Published APR 2011
Smart Phones, Digital Cameras and Laptops will Sustain
Demand Page 5
© GBI Research. This is a licensed product and is not to be photocopied
8.2.1 Geographies Covered ............................................................................................. 98
8.2.2 End-User Types covered ......................................................................................... 98
8.3 Abbreviations .................................................................................................................. 99
8.4 Methodology ................................................................................................................. 100
8.4.1 Market Size Estimates ........................................................................................... 101
8.4.2 Market Size Forecasts ........................................................................................... 101
8.4.3 Breakdown Estimates ............................................................................................ 102
8.4.4 Market Share Estimates ........................................................................................ 102
8.4.5 Coverage ............................................................................................................... 102
8.4.6 Secondary Research ............................................................................................. 102
8.4.7 Primary Research .................................................................................................. 103
8.4.8 Expert Panel Validation ......................................................................................... 103
8.5 Contact Us .................................................................................................................... 103
8.6 Disclaimer ..................................................................................................................... 103
Digital Signal Processor (DSP) Market to 2020 - Sales Growth in