IDC Projects Worldwide LAN Semiconductor Market Will Reach $3.3 Billion in 2003
MOUNTAIN VIEW, Calif. – November 2, 1999 — According to a newly published report from International Data Corporation (IDC), semiconductor revenues within local area networking (LAN) equipment segments, which include routers, switches, and network interface cards (NICs), will grow 14.8% from 1998. Increased competitive price pressures combined with significant chip integration will continue to influence the future of the LAN semiconductor market. IDC reports the total market will reach $2.6 billion in 1999 and then slowly level off in growth, posting $3.3 billion in revenues in 2003, a 5.1% compound annual growth rate through the forecast period. In particular, Fast Ethernet switch chips will become the primary driver, accounting for 50.7% of total LAN semiconductor revenues in 2003.
"Adoption of lower-cost standard products (ASSPs) over customized in-house silicon designs (ASICs), especially in the segments of layer-2 and layer-3+ LAN switching, will remain a key issue for networking OEMs to examine in the future," said Sean Lavey, research analyst for IDC's Semiconductor research program. "The push to produce more intelligent LAN systems to spark the convergence of data, voice, and video traffic remains at an all-time high as OEMs scramble to produce more cost-effective solutions within shorter time-to-market windows. IDC believes the increased competition and resulting price erosion affecting the LAN market will continue to expand the value-added role of merchant silicon suppliers in both low-end and high-end equipment segments."
In the end, IDC believes the penetration of semiconductor standard products will become a major force in the industry as several key chip technologies integrate into one another along with higher layer networking functionality.
Worldwide LAN Semiconductor Market Review and Forecast, 1997-2003 (IDC #B20732) provides a top-line forecast for all major semiconductor product categories, including ASSP/ASICs (i.e., transceivers, controllers, repeater chipsets, and switch chipsets), MPUs, FPGAs/PLDs, memories, and other components. In addition, the report provides comprehensive analysis on present and future equipment architectures through primary and secondary research, which includes IDC's LAN equipment forecasts, formal surveys, semiconductor and system vendor discussions, and IDC's bill-of-materials equipment tear-down research.
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