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Analysts highlight IC growth drivers

Posted: 24 Mar 2010 ?? ?Print Version ?Bookmark and Share

Keywords:IC growth drivers? PC market? Android? baseband? LCD?

Ready for Android?
Plenty of new smart phones are on the way this year from Korea's top handset makers, and a large portion of them will be based on Google Android.

Samsung will release 40 new handsets in 2010, half of them based on Google Android, said Jeff Kvaal, a communications hardware analyst at Barclays. For its part, LG plans to release 20 new touchscreen smart phones targeting sales of as many as 80 million units, and 70 percent of those devices will be based on Android.

The trend is great for Google and its backers. But it could be a negative for Motorola which is betting its comeback in handsets on its ability to design standout Android phones like the Droid and as many as 20 follow-on handsets it has in the works, Kvaal said.

"With more Android players, tension for differentiation and fragmentation is likely to become more acute," he added.

Upticks for Broadcom, Infineon?
Samsung and LG both plan to diversify their suppliers of cellphone baseband chips this year, said Tim Luke, semiconductor analyst at Barclays. The moves could see Infineon win more business in mid- and low-end 3G phones from both Korean companies and Broadcom gain business in Samsung's high-end handsets all at the expense of Qualcomm, he said.

Qualcomm will likely retaliate by more aggressively seeking business with other top tier cellphone makers including Motorola and Nokia, Luke said.

Inventory challenges everywhere
The only downside ahead is the possibility for shortages and inventory build ups which so far look modest, according to the Barclays analysts. Luke cited the possibility of double- or pre-ordering affecting supplies of analog, memory and power management chips.

"For now channel inventory and inventory on hand is modest," said Luke. But "visibility into the second half of the year is somewhat more limited," he added.

Graphics, some displays and other chip- and board-level components may be in short supply for a few weeks or months.

"Clearly AMD and Nvidia have seen shortages [in graphics processors] now that could be alleviated in May," Luke said. In addition, "some industry sources are suggesting that there are shortages of flip-chip substrates used by Intel for 32nm [processors] which may possibly restrain [Intel's] 32nm ramp," he said.

In flat-panel displays both supply and demand appear to be tracking upwards, according to C.J. Muse, Barclays' analyst for displays and semiconductor capital equipment. Orders from the last two weeks suggest panel demand in the first months of 2010 could be flat from the previous quarter, rather than down as much as 10 percent as previously expected. Separately, companies including TCL, Panda, Sharp and LG could make investments in as many as five new advanced LCD fabs in China this year, he added.

- Rick Merritt
EE Times

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