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Innovation to drive industry growth

Posted: 04 Jan 2012 ?? ?Print Version ?Bookmark and Share

Keywords:DTV? Android? semiconductor industry?

Heading into 2012, a weak U.S. economy and the European financial crisis leave us with an uncertain macroeconomic picture. Despite this, the Asia Pacific region remains a bright spot. Taiwan, Singapore and Korea are holding strong, and China is exploding with new startups, most of which are focused initially on domestic consumption with the eventual goal of export.

In the markets where MIPS Technologies Inc. holds a strong position, such as networking and the digital home, the markets are very dynamic. In the area of DTV, consolidation and changing competitive dynamicssuch as Intel's recent decision to shutter its DTV businesshave altered the landscape and opened more opportunities for licensed IP. Analysts predict continued softness in the digital home, and flat growth in DTV sales over the short-term. However, the DTV market should return to strength over time as smart TV gains traction, and as digital home entertainment products make their way into geographies where they were never before possible.

In networking, the news is promising despite some current softness. Worldwide, among some larger OEMs, there are reports of inventory rebalancing and also push-out of capital expenditures among carriers and enterprise customers as some telecom infrastructure build-outs are delayed. But in the past year, MIPS has seen great success with many of our licensees, including: Cavium Networks' new chips for LTE and 3G small-cell basestations; Netlogic's new 28nm multicore communications processors that bring 5 to 7x performance enhancement over existing solutions; and Ikanos' new dual-core communications processors. MIPS licensees Lantiq and Altair Semiconductor also announced they are collaborating to bring broadband 4G LTE hotspots to home networks.

And analysts anticipate growth over the next two to three years. This is particularly true in China, as the country shifts from sourcing network processors from outside the country toward developing its own indigenous network processor industry.

MIPS Technologies is seeing many of our Asia Pacific customers continue to innovate, ship new products and achieve success. This innovation, which is particularly robust in China, will drive growth in 2012.

A particular bright spot is the mobile market, which is a new market for MIPS Technologies. The market for mobile products, including tablets and smartphones, is growing quickly, especially in Asia. Much of this growth is in the market for Android smartphones and tablets. According to a recent report from ABI Research, smartphone shipments in Asian markets will see a boost for Android-based smartphones, with market share increasing to 52 percent in 2011, up from 16 percent in 2010.

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