Moderate growth predicted for signal generator market

Manufacturers of signal generators must adapt their products to comply with evolving wireless standards.

Fernando Nara, Research Associate, Measurement & Instrumentation, Frost & Sullivan -- Test & Measurement World, 10/1/2011 12:00:00 AM

Chip sales slowing rapidly

The next 10 years will be a “wireless decade,” as products offering 3G, 4G, and WCDMA wireless interfaces will proliferate. We will see different types of wireless devices beyond the traditional ones, and their fast development and implementation will be the key factor driving the demand for signal generators. It will be imperative for manufacturers of signal generators to adapt their products to comply with evolving wireless standards.

Although the signal generator market has bounced back from the economic crisis of 2009 and is surpassing the levels of 2008, caution and uncertainty continue to restrain end users from making capital expenditures. The industry is demanding products that offer higher performance and higher functionality, yet at a lower cost. In the Asia-Pacific region, the manufacturing base has been increasing and the focus on production has created a much more cost-sensitive environment, boosting the market for signal generators.

Higher bandwidth is the number-one requirement for end users. A greater number of digital modulations transport more data in the same bandwidth, making the modulations more likely to generate imprecise levels of transmissions and phase angles. Signal generators, therefore, play a critical role in test systems. As Bob Buxton, marketing manager in the general-purpose business unit at Anritsu, said, “a signal generator is the heartbeat of the test system; power level is the strength of the heartbeat, accuracy of the instrument is the heart rate, and the quality of the signal is the profile of the heartbeat.” A key driver for vendors of signal generators will be the ability to provide higher frequencies and lower phase noise in their products.

During the economic downturn of 2009, the global revenue for both RF and microwave signal generators declined by an average of 22%. According to Frost & Sullivan’s analysis, the RF signal generator market held the largest market share at 57.3% and is projected to reach $365.8 million in 2011, while the microwave signal generator market accounted for 42.7% of the market and will reach $273.1 million in 2011.

Overall, Frost & Sullivan believes that the signal generator market will experience moderate growth during the forecast period. The compound annual growth rate for RF and microwave signal generators from 2011 to 2015 is estimated at 3.2% and 3.4%, respectively. T&MW

Chip sales slowing rapidly By Peter Clarke, EE Times Market-research company Gartner has joined rival prognosticators in predicting the 2011 global chip market will decline from the previous year. The company has also halved its forecast for chip market growth in 2012 with the warning that a US double-dip recession would require a further downward sales revision. The worldwide semiconductor market has been slowing throughout 2011 and is now set to have a revenue total of $299 billion, a decline of 0.1% from 2010, according to the Stamford, CT-based firm. This is a significant change from Gartner’s previous projection, given in the second quarter, for 5.1% growth this year. “Three key factors are shaping the short-term outlook: excess inventory, manufacturing overcapacity, and slowing demand due to economic weakness,” said Bryan Lewis, research VP at Gartner, in a prepared statement. “Semiconductor companies’ third-quarter guidance is well below seasonal averages. The current guidance by vendors points to flat to down third-quarter growth. Typically, we see guidance for 8 to 9% growth in the third quarter because of back-to-school and the holiday build. The supply chain is also showing significant slowdown, and semiconductor-related inventory levels are still elevated.” One of the main problem areas for chipmakers is PC production, Gartner reckons. Last quarter, Gartner estimated PC production growth of 9.5%; that has now been reduced to 3.4%. The falling demand for PCs, in part highlighted by the popularity of the tablet computer and smartphone, means DRAM sales and prices have been severely impacted. The value of DRAM sales is now expected to decline 26.6% in 2011. Meanwhile NAND flash and data-processing ASIC are the fastest-growing device areas in 2011, with about 20% growth.