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3G roll-out to boost semiconductor market

Spending will continue to rise

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3G telecoms will be the shot in the arm the wireless semiconductor industry needs, according to IDC. After several years of lower spending, the research company estimates that the market for base station semiconductors will be worth $1.9bn this year, reaching $2.4bn by 2008.

Sean Lavey, program manager at IDC said that there would be further cost reductions at the chip level for key 3G baseband, transceiver, and power amplifier subsystems: "This will help jumpstart expansion and upgrades to data-enabled cellular networks." Lavey notes that the main trends to watch for are stronger OEM backed standarisation activity, and a shift to an off-the-shelf approach.

The ongoing adoption of 2.5G and 3G data services in what IDC calls "first-wave regions", along with demand for basic voice services in other parts of the world, will keep spending for base station gear on a steady increase.

IDC expects that the 3G segment of will become the major driver of this growth, predicting a compound annual growth rate (CAGR) of 28% by 2008. ®

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