US : Mobile phone penetration continues to rise in developing countries such as India and China. This market penetration has created numerous opportunities for handset manufacturers, thereby directly driving the market for handset radio frequency (RF) semiconductors. With 2.75G yet to take off and the deployment of third-generation (3G) in the pipeline, the market for RF semiconductors in these countries will likely thrive in the next few years.

New analysis from Frost & Sullivan, World Handset RF Semiconductor Markets, reveals that among all segments considered, the RF transceivers market generated the most revenues, earning revenues totaling $3.045 billion in 2006 and will likely reach $5.95 billion in 2010.

“Mobile handsets have evolved rapidly, from a simple and voice-only device to a sophisticated device that supports voice, high-speed data, and other applications such as global positioning system (GPS) and Bluetooth,” says Frost & Sullivan Research Analyst Gokul Ramanujam. “The adoption of 3G technology has also aided handset and RF semiconductor manufacturers with 3G phones requiring a design with higher complexity.”

The handset radio frequency (RF) semiconductor markets continue to steadily progress, with most segments showing significant growth. The high volume shipments of mobile handsets over the last few years have greatly contributed to the growth of these segments. Moreover, with fourth-generation technology (4G) and 3G long-term evolution (LTE) in the developmental stages, this market will likely grow exponentially in the future.

However, the evolution of the mobile phone to a multi-dimensional device has exerted enormous pressure on both handset manufacturers and RF semiconductor companies to pack in as many functions as possible in the limited front-end space. To stay in line with board space constraints and consumer demand, an emphasis on reduced component count, form factor, and BoM represents a key trend in the market.

"To enable this scenario, the kind of scaling proposed by Moore’s Law would be ideal, but is not realistically possible in all cases," says Gokul. "A balance of all factors such as reduced component count, combined with cost effectiveness, is likely to assist RF semiconductor manufacturers in revenue generation."

The transition to integration has affected the market for discrete component manufacturers by reducing profits, as all companies in the value chain strive to increase their profits. Companies with a diverse product line and the skill to integrate discrete components into modules will likely succeed in this market.