Strategy Analytics: WLAN Chip Market to Approach $1 Billion in 2008, but Few Commodity Specialists Will Survive.

Business Editors/High-Tech Writers

BOSTON--(BUSINESS WIRE)--Sept. 10, 2003

Integration of Wireless LAN Chipsets at System Level Critical

The Strategy Analytics report, "The Market for RF Components for 802.11 WLAN," indicates that while declining prices and consolidation in the overcrowded chipset supplier base will continue at breakneck speed, Intel, Broadcom, Texas Instruments and Atheros are best positioned for long-term success. Makers of power amplifiers for 802.11 face brighter prospects as dual-band combo WLAN devices increase in popularity.

Power amplifiers will remain distinct from the chipset in most WLAN devices. According to Chris Taylor, Director, RF Component Strategies, "Few chipset makers have the expertise to produce high-power, low-cost power amplifiers for WLAN. The best performing power amplifiers typically use specialized gallium arsenide or silicon germanium transistor processes, and require heat-dissipating packaging. Power amplifier makers must now address the challenges of improving efficiency for longer battery life in portables, and the challenges of combining 802.11g and 802.11a power amplifiers in compact, single package designs."

Other key findings from "The Market for RF Components for 802.11 WLAN," include:

-- Contract manufacturers in Taiwan will take on greater

importance for chipmakers, as will competition from emerging

fabless chip companies in Southeast Asia;

-- Single-chip CMOS radios for WLAN will soon emerge at very low

price points;

-- By 2005, 802.11a/g combo devices will gain the upper hand in

the market, and will account for more than half of all device

shipments.

Only a few vendors of commodity WLAN chipsets will survive. Higher profit margins will depend on shifting focus to more complex chips that offer functions complementary to WLAN for enterprise, home entertainment devices, telephone systems, and automobiles.

               Global 802.11 WLAN Chip Forecast(1)

                        2002       2003       2008

$Millions                487        637        963
Annual Growth rate        --        31%        14%
                                             (CAGR)

Source: Strategy Analytics

(1) RF switches, power amplifiers, transceivers, medium access
    control, and baseband chips for 802.11 WLAN.

About Strategy Analytics

Strategy Analytics, Inc., a global research and consulting firm, provides timely insights and strategic business solutions to companies operating at the convergence of information, communications and entertainment technologies. With worldwide headquarters in Newton, MA and principal offices in England, France and Germany, Strategy Analytics focuses on market opportunities and challenges in the areas of Automotive Electronics, Broadband, Telematics, Wireless Strategies and Enabling Technologies. For more information, see www.strategyanalytics.com