e.Digital Corporation (fka EDIG)

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Audio chip market growth could hit $6.8 billion by 2007


By Margaret Quan

EE Times
May 2, 2003 (11:36 a.m. ET)

MANHASSET, N.Y. — A new study projects audio chip sales will grow 22 percent annually between 2002 and 2007, with growth mostly driven by consumer electronics products such as digital a/v receivers, set-top boxes, DVD and MP3-type portable players.The audio chip report by Forward Concepts (Tempe, Ariz.) estimated audio chip revenues totaling $2.5 billion in 2002 would grow to $6.8 billion in 2007, with growth coming primarily from the consumer audio market.

Revenue from audio chips sold into consumer applications increased 33 percent to 85 percent of the market in 2002 and are expected to climb to almost 92 percent of the audio chip market by 2007.

Meanwhile, PC audio is expected to drop to only a 2.5 percent share; professional audio will decline slightly from 8 percent in 2002 to 6 percent during the period, the report said.

Near-term audio chip sales will rise only 15 percent in 2003, with most growth coming from Europe and Asia while the industry slump stunts growth in the U.S.

Forward Concepts said the the market for consumer audio chips is led by Cirrus Logic Inc (Austin, Texas), but that Austin-based SigmaTel Inc. is gaining market share. At the same time, some former competitors in the MP3/WMA (Windows Media Audio) player sector, such as Micronas Semiconductor and Texas Instruments Inc., have downgraded the segment in favor of more complex audio/video and multimedia products where margins are higher and where there is more room for revenue growth.

Forward Concepts said top player in PC audio in 2002, Analog Devices Inc, is feeling the heat from competitors Realtek Semiconductor Corp of Hsinchu, Taiwan, and SigmaTel Inc.