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Digital Home Semiconductor Opportunities

Opportunities still exist in the digital subscriber line (xDSL) and cable modem semiconductor markets over the 2007-2011 period, according to a new IDC market study.

Despite falling ASPs, semiconductor suppliers who can deliver viable solutions for supporting VDSL2, and quad-play (voice, data, video, wireless) services in customer premise equipment (CPE) -- such as residential gateways within the digital home environment -- will be in a better position to carve out their share of the growth opportunity.

"In an effort to remain competitive and profitable, many telcos and multi-system operators (MSOs) strive towards the delivery of quad-play offerings, encouraging a replacement of central office (CO) equipment and CPE," said Aileen Arcilla, senior research analyst for IDC's semiconductor programs. "Increased sales, however, are offset by quickly declining ASPs.

Semiconductor companies that can incorporate the needed functions into single chip solutions, stand the best chance of maintaining ASPs and remaining competitive." Among the key findings of the study are the following:

- The overall xDSL semiconductor market will increase and reach $1.3 billion in 2011, albeit a small 2007-2011 CAGR.

- The need for cable modems with integrated VoIP functionality will drive growth for cable modem semiconductors in the first half of the forecast period as MSOs offer voice services to compete with telcos.

- ADSL chipsets will continue to drive most DSL deployments worldwide during the forecast period.

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