Power management spurs growth in mobile communications

While 2011 gave us a variety of natural disasters to worry over, an even larger concern for the semiconductor industry is the macro economic impact from the U.S. deficit debate and the European financial crisis combined with the more controlled growth in the Asian market. Reports of these struggling economies are driving consumer confidence down as fears of another recession loom. The result is an overly cautious OEM market reaction where the supply chain has stopped ordering parts and is burning off inventories.

The driving assumption for the Semico Research Corp. forecast is the continuing rich semiconductor content in electronics products. Within each end-use product, more memory and sophisticated baseband and application processors are being installed, and higher usage of MEMS is observed. However, consumers are shopping for bargains, and spending less on HDTVs, cameras, games and set-top boxes. This resulted in a slower revenue growth for 2H 2011.

However, the market has reacted quickly to this slowdown. By Q1 2012, companies will realize that inventories need to be replenished and will once again fill the supply chain pipeline in order to keep the production lines running. Semico is forecasting a return to semiconductor revenue growth in 2012.

So which markets will be driving growth in 2012? While the consumer is spending less in 2011, there are a handful of areas that will have high growth rates throughout 2015. Tablets, smartphones, netbooks, and e-readers are among the leaders. For example, the smartphone segment is performing well, and printed circuit board manufacturers in Asia reported that smartphone builds were robust in Q3 with a 10 percent growth rate. Q4 will show a seasonal slowing, however.

Motorola Mobility is outsourcing smartphones valued at below $350 to Foxconn and Arima Communications, and together with Sony Ericsson are driving Taiwan component makers to run at full capacity. Smartphones are a good bet for Asia Pacific, not only on the manufacturing end, but on the consumer side as well, with smartphone penetration rates in Taiwan reaching about 35 percent in 2011 from 18 percent the previous year. It is no wonder then that Foxconn and Nvidia are planning to open a mobile device R&D facility in China.


Cellphone Sales By Major Category (Units in Millions)


Source: Semico Research Corp.


Within the mobile market, power management device revenues and units have been growing at an above average rate. Power management devices are necessary in wired devices as well as portable devices since heat and power are becoming more of a focus for all electronic devices. Total analog revenues grew at a CAGR of 3.3 percent from 2000 to 2010. Revenues attributed to power management devices grew by 9.4 percent over the same period, almost three times the rate of the overall analog market.

Power management is a critical function in all communication devices. We often say that the digital function or CPU is the brain behind the electronic device; however, the analog functions and, more specifically, power management, are truly the heart of every communications device. Power management determines how much and how fast devices can process information. If a device begins to radiate excess heat, power management devices can control operations to moderate power loss and optimize the device's efficiency.

Portable devices require high efficiency power management. The broadest and strongest market demand is for a power management IC that can operate within the 5V to 24V range. There are several factors that will make a product successful. A robust BCD (Bipolar CMOS DMOS) process technology is critical. Many of the foundries offer manufacturing services targeting this market. One example is Dongbu HiTek’s BD180LV 0.18um BCDMOS process. Their process is rated at 30V. This process allows the flexibility to provide the customer with 30V LDMOS with a dense 1.8V CMOS logic.

The key to power management is striking the right balance between power, performance, reliability and process complexity in order to provide the most efficient and cost effective solution. Combined, the mobile consumer market will add $309 billion to the semiconductor market by 2015, and much of this growth will be spurred by innovations within the power management sector.


Semico Research Corp.