Demand Towards Base Station Equipment Set to Decline: Report

Cellular Base Station Chip Makers Face Declining Demand – Analysts

by Anton Shilov
01/14/2009 | 08:14 AM

For those making base station equipment and the semiconductors used in them, the next few years may be difficult ones, reports In-Stat market research firm. Consumers are cutting their spending in general and operators are unlikely to kick off further upgrades of their networks. As a result, the market of base station hardware will decline.

 

“Many operators have spent heavily on 3G upgrades and they are now waiting for service revenues from these networks before they invest more. In addition, the number of subscribers in many areas is reaching saturation, with former double-digit subscriber growth now running in the mid-to-low single-digits,” explained Allen Nogee, an In-Stat analyst.

Base station semiconductor revenue will drop from $7.2 billion in 2007 to $4.6 billion in 2008. The slowing worldwide economy is having wide-ranging negative effects all regions, with the possible exception of Africa.

“The global recession will also have an impact. Although most people aren’t likely to part with their cell phones, they may replace them less often, and reduce services they don’t find value in or can’t afford,” added Mr. Nogee.

Of the main technology types, WCDMA is the only technology expected to yield semiconductor revenue growth between 2008 and 2012.