DSL IC Market Rebounding, Shifting to VDSL Reports In-Stat/MDR.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Oct. 6, 2003

In-Stat/MDR (http://www.instat.com) reports that the market for DSL ICs rebounded, in terms of port shipments, in 2002, after a difficult 2001 that was characterized by an excess of inventory in the face of slower overall deployment of ADSL than had originally been expected at the height of the of telecom "bubble" in 2000. The high-tech market research firm finds that total silicon shipments rose from 38.1 million ports in 2001 to 50.0 million ports in 2002. However, due to declining ASPs, total DSL IC revenue fell from US$ 699.0 million in 2001 to US$ 594.9 million in 2002.

"There are a number of drivers and challenges for DSL services and equipment, and, as a component-level device, DSL IC shipments are largely a function of the growth of DSL services," says Sam Lucero, an Industry Analyst with In-Stat/MDR. "Key drivers include consumer demand for broadband content and services, new service provider revenue opportunities, reduction of subscriber churn, dense urban populations in Asia and, to a lesser extent, Europe, and, strong service provider competition in Asia." Challenges seem to be US focused, and Lucero cites them as service provider financial difficulties in the US, longer local loop lengths in the US, the problematic US regulatory situation, predominance of cable modems as the broadband access technology of choice in the US, and content provider intransigence.

In-Stat/MDR has also found that:

-- The DSL IC market was fairly concentrated in 2002, with the

top four vendors -- GlobespanVirata, ST Micro, Centillium, and

Texas Instruments, together, "owning" about 81% of the total

ports shipments to the market in 2002. However, other vendors

shipped significant portions of DSL sub-category ICs, such as

VDSL and SHDSL.

-- In-Stat/MDR expects the total market for DSL ICs to grow from

about 50.0 million ports in 2002 to 107.9 ports by 2007.

Likewise, total revenue is expected to rise from about US$

594.9 million in 2002, to US$ 732.8 million by 2007.

-- The percentage of the total market represented by ADSL will

decline through 2007, while the percentage of the total market

represented by VDSL will grow significantly, mostly in the

Asia Pacific region. Although SHDSL will grow strongly over

the forecast period, it will not comprise more than 10% of the

market, by 2007.

The report, "DSL ICs: The Shift to VDSL Begins" (#IN030668NT), analyzes the market for DSL physical layer ICs, focusing on ADSL (including ADSL2 and ADSL2+), VDSL and SHDSL. Key technology and market trends are discussed and market drivers and challenges are thoroughly reviewed, from the standpoint of those factors that will impact service provider decisions to deploy DSL in their networks. The overall structure of the industry is analyzed and port shipments and market shares are provided for all of the vendors active in the market in 2002. Five-year forecasts, from 2003 - 2007, are provided for ADSL, VDSL and SHDSL for both CO and CPE ports and include port shipments, ASPs and revenues. Finally, brief vendor profiles are given. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/Ncatalogue.asp?id=28 or contact Courtney McEuen at 281-246-4668; [e-mail]. The report price is $2,995 U.S. Dollars.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end-users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.